Key Takeaways
- • PE exits and broader dealmaking activity are significantly lagging behind wider M&A activity in 2026, creating operational pressure on secondary market infrastructure and the mechanisms supporting liquidity in private assets.
- • Democratization of private markets is expanding addressable AUM for secondaries while simultaneously introducing a wider range of investor profiles, requiring robust operational standardization around valuation frequency, liquidity management, and complexity reduction.
- • AI-powered data infrastructure has become mission-critical for secondaries infrastructure; the number of firms leveraging AI in any form has more than doubled year-over-year, though most applications remain in early-stage, task-specific use cases.
- • The convergence of public and private markets—evidenced by retail participation in secondaries—demands operational sophistication comparable to traditional capital markets, necessitating standardized frameworks for settlement, valuation, and investor servicing.
Summary
The secondary markets infrastructure faces mounting pressure as private equity exits and dealmaking activity lag significantly behind broader M&A momentum in 2026. This structural divergence has placed acute demands on the operational backbone supporting secondary transactions, forcing market participants to reckon with both execution complexity and capacity constraints. Despite these headwinds, the infrastructure supporting secondaries has demonstrated a trajectory toward increased sophistication, driven simultaneously by growing transaction demand and a forward-looking build-ahead approach as transaction volumes outpace assets under management growth.
Democratization represents the central challenge reshaping secondary market dynamics. By expanding access to private markets across broader investor bases and retail participation, democratization is simultaneously increasing secondary market transaction volumes while introducing heterogeneous investor interests and liquidity requirements. This expansion requires substantially more robust operational engineering than previously existed. Critical pain points—including valuation frequency standards, meeting diverse liquidity requirements, operational standardization gaps, and systemic complexity—are now top-of-mind issues manifesting across industry commentary and headline coverage globally.
The response has centered on leveraging artificial intelligence and advanced data infrastructure. AI has transitioned from a theoretical capability to a practical necessity for secondary market operators managing scaled transactions across fragmented investor bases. While most firms currently deploy AI for foundational, task-specific applications rather than transformative analytics, the adoption curve has accelerated sharply; the number of firms actively leveraging AI in any capacity has more than doubled year-over-year. This infrastructure development represents the practical embodiment of public-private market convergence, where secondaries serving retail investors require comparable operational sophistication to traditional exchange-traded markets. The challenge is not merely technological but structural: secondary markets must now deliver standards of transparency, settlement efficiency, and valuation robustness previously reserved for liquid public markets while managing the inherent complexity of illiquid underlying assets.
Democratization represents the central challenge reshaping secondary market dynamics. By expanding access to private markets across broader investor bases and retail participation, democratization is simultaneously increasing secondary market transaction volumes while introducing heterogeneous investor interests and liquidity requirements. This expansion requires substantially more robust operational engineering than previously existed. Critical pain points—including valuation frequency standards, meeting diverse liquidity requirements, operational standardization gaps, and systemic complexity—are now top-of-mind issues manifesting across industry commentary and headline coverage globally.
The response has centered on leveraging artificial intelligence and advanced data infrastructure. AI has transitioned from a theoretical capability to a practical necessity for secondary market operators managing scaled transactions across fragmented investor bases. While most firms currently deploy AI for foundational, task-specific applications rather than transformative analytics, the adoption curve has accelerated sharply; the number of firms actively leveraging AI in any capacity has more than doubled year-over-year. This infrastructure development represents the practical embodiment of public-private market convergence, where secondaries serving retail investors require comparable operational sophistication to traditional exchange-traded markets. The challenge is not merely technological but structural: secondary markets must now deliver standards of transparency, settlement efficiency, and valuation robustness previously reserved for liquid public markets while managing the inherent complexity of illiquid underlying assets.
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