Key Takeaways
- • Record 2024 volume and stronger 2025 outlook: The secondary market closed 2024 with $156 billion in transaction volume—a 35% year-over-year increase and the highest annual figure on record, surpassing the previous 2021 peak. UBS Private Funds Group projects approximately $180 billion in volume for 2025, split evenly between LP-led and GP-led transactions.
- • GP-led momentum drives structural shift: GP-led transactions reached $70 billion in 2024, representing nearly 10% of total exit value for sponsor-backed companies globally. Continuation funds (single and multi-asset structures) dominated this segment, accounting for over 85% of GP-led volume and emerging as the preferred liquidity mechanism for general partners.
- • LP-led volume gains traction with tighter spreads: LP-led secondary volume hit $86 billion as bid-ask spreads compressed due to strong investor demand, record dry powder levels, and limited distribution activity. Buyout funds comprised over 80% of LP-led transaction volume, with single-digit discounts becoming the market norm.
- • Pricing improvements narrow valuation gaps: GP-led transaction pricing continued to strengthen in 2024, with the vast majority of deals pricing at 90% or above NAV, indicating reduced friction and improved confidence in secondary valuations across the market.
- • Liquidity-driven demand amid distribution scarcity: Both GPs and LPs are prioritizing liquidity as a strategic objective in a market characterized by prolonged holding periods and limited distribution activity, fundamentally reshaping how investors access capital and manage portfolio exposure.
Summary
The secondary market for private equity reached a historic inflection point in 2024, establishing new benchmarks for transaction volume and activity that underscore a structural shift in how general and limited partners manage liquidity. According to UBS, the market closed 2024 with $156 billion in closed transaction volume—a 35% increase over 2023 and the highest annual figure in the secondary market's history, surpassing the previous record set in 2021. This sustained momentum reflects deepening institutional adoption of secondary solutions as GPs and LPs navigate an environment marked by prolonged asset holding periods and constrained distribution activity.
GP-led transactions have emerged as the primary growth driver, with this segment reaching $70 billion in volume during 2024 and now representing approximately 10% of total exit value for sponsor-backed companies globally. Continuation funds—both single and multi-asset structures—dominated GP-led activity, collectively accounting for over 85% of volume in this category. This structural preference reflects the continued appeal of continuation funds as an efficient mechanism for GPs to extend investment horizons, consolidate assets, and provide liquidity to their investor base without requiring traditional exit events.
On the LP side, secondary volume reached $86 billion, driven by record levels of dry powder among secondary-focused investors, tightening bid-ask spreads, and sustained appetite for exposure to private assets. Buyout funds remained the most actively traded fund type, representing over 80% of LP-led transaction volume, with single-digit discounts becoming increasingly common—a notable pricing improvement that reflects stronger market conditions and reduced valuation friction. This convergence toward narrower discount bands signals growing confidence in secondary pricing mechanisms and market maturity.
Looking forward, UBS Private Funds Group anticipates approximately $180 billion in secondary market transaction volume for 2025, with an anticipated even split between LP-led and GP-led activity. This projection assumes continued momentum in GP-led continuation funds, sustained demand from LP-focused secondary investors, and an ongoing scarcity of traditional distributions that continues to make secondary solutions strategically attractive for institutional investors managing extended portfolio lifecycles.
GP-led transactions have emerged as the primary growth driver, with this segment reaching $70 billion in volume during 2024 and now representing approximately 10% of total exit value for sponsor-backed companies globally. Continuation funds—both single and multi-asset structures—dominated GP-led activity, collectively accounting for over 85% of volume in this category. This structural preference reflects the continued appeal of continuation funds as an efficient mechanism for GPs to extend investment horizons, consolidate assets, and provide liquidity to their investor base without requiring traditional exit events.
On the LP side, secondary volume reached $86 billion, driven by record levels of dry powder among secondary-focused investors, tightening bid-ask spreads, and sustained appetite for exposure to private assets. Buyout funds remained the most actively traded fund type, representing over 80% of LP-led transaction volume, with single-digit discounts becoming increasingly common—a notable pricing improvement that reflects stronger market conditions and reduced valuation friction. This convergence toward narrower discount bands signals growing confidence in secondary pricing mechanisms and market maturity.
Looking forward, UBS Private Funds Group anticipates approximately $180 billion in secondary market transaction volume for 2025, with an anticipated even split between LP-led and GP-led activity. This projection assumes continued momentum in GP-led continuation funds, sustained demand from LP-focused secondary investors, and an ongoing scarcity of traditional distributions that continues to make secondary solutions strategically attractive for institutional investors managing extended portfolio lifecycles.
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