Key Takeaways
- • Private equity secondaries delivered a 20.6% average return for private foundations in 2025, leading all alternative asset classes and outperforming commodities and futures (20.1%) and venture capital (12.7%).
- • The secondaries asset class achieved record growth in 2024 and continued momentum through 2025, with the global secondary market reaching $240 billion in transaction volume—a 48% year-over-year increase.
- • Secondaries fundraising has more than doubled over the past five years, reaching approximately $160 billion in 2025, reflecting scaled institutional capital deployment in the secondary market.
- • A significant portion of secondaries' strong returns for foundations appears attributable to accounting mark-ups from discounted purchases rather than underlying operational performance, a distinction critical for return attribution analysis.
Summary
Private equity secondaries emerged as the top-performing alternative investment category for private foundations in 2025, posting a 20.6% average return that exceeded all competing asset classes. This performance placed secondaries ahead of commodities and futures, which delivered 20.1% returns, and venture capital, which generated 12.7% average gains. The strong relative positioning of secondaries reflects both the maturation of the secondary market and increased institutional appetite for this asset class.
The secondary market for private equity reached a milestone in transaction volume during 2025, achieving $240 billion in total deal value—representing a 48% increase year-over-year. This represents the continuation of record-breaking growth that began in 2024, driven by expanded liquidity options and enhanced portfolio management capabilities for limited partners. The market's sustained momentum demonstrates structural demand from institutional investors seeking secondary exposure.
Fundraising activity in the secondaries space has scaled substantially, with capital raises more than doubling over the past five years to reach approximately $160 billion in 2025. This capital growth has enabled secondaries managers to execute larger, more diversified portfolios and access a broader universe of underlying private equity assets. However, market observers noted that a meaningful portion of the 20.6% return posted by foundations should be attributed to accounting mark-ups generated from the discounted-purchase nature of secondary transactions rather than improvements in underlying portfolio company operations. This distinction carries analytical significance for institutional investors evaluating true performance drivers and assessing whether returns are sustainable across market cycles.
The secondary market for private equity reached a milestone in transaction volume during 2025, achieving $240 billion in total deal value—representing a 48% increase year-over-year. This represents the continuation of record-breaking growth that began in 2024, driven by expanded liquidity options and enhanced portfolio management capabilities for limited partners. The market's sustained momentum demonstrates structural demand from institutional investors seeking secondary exposure.
Fundraising activity in the secondaries space has scaled substantially, with capital raises more than doubling over the past five years to reach approximately $160 billion in 2025. This capital growth has enabled secondaries managers to execute larger, more diversified portfolios and access a broader universe of underlying private equity assets. However, market observers noted that a meaningful portion of the 20.6% return posted by foundations should be attributed to accounting mark-ups generated from the discounted-purchase nature of secondary transactions rather than improvements in underlying portfolio company operations. This distinction carries analytical significance for institutional investors evaluating true performance drivers and assessing whether returns are sustainable across market cycles.
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