Key Takeaways
- • Private equity secondaries market reached a record $226 billion in transaction volume in 2025, representing 41% year-over-year growth, according to Evercore data, with projections for the market to exceed $300 billion by 2026.
- • LP-led secondary sales surged approximately 35% to $120 billion as limited partners increasingly seek liquidity independent of traditional fund exit timelines, driven by exit droughts and the impact of elevated interest rates on cash distributions.
- • Despite record deployment, the secondaries market maintains $215 billion in dry powder with projected fundraising targets of $218 billion (81% year-over-year growth), indicating sustained institutional capital allocation to the sector.
- • Dell's family office (DFO Management) and other sophisticated investors are actively targeting discounted secondary assets trading below par, positioning for opportunities amid market dislocations and expectations of rising default rates in 2027–2028.
- • Retail investor access to secondaries is expanding through publicly listed asset managers and evergreen 40 Act funds, which now represent nearly one-third of secondary market fundraising, broadening the buyer base and intensifying competitive dynamics.
Summary
The private secondaries market has evolved from a cyclical liquidity tool into a structural component of institutional capital management. Transaction volumes surged to a record $226 billion in 2025, up 41% year-over-year, reflecting fundamental shifts in how limited partners access liquidity within private markets. The first half of 2025 alone generated $103 billion in deal volume, signaling sustained momentum despite macroeconomic headwinds. According to Evercore, secondaries fundraising is projected to reach $218 billion, representing 81% year-over-year growth, while dry powder remaining in the market stands at approximately $215 billion—indicating robust capital availability for continued deal activity.
The primary driver of this expansion is LP-led demand for liquidity. Limited partners increased secondary sales by roughly 35% to $120 billion as they seek alternatives to traditional fund liquidation cycles and face constraints from an extended exit drought in primary markets. Higher interest rates have compounded this pressure by reducing cash distributions and dampening M&A and IPO activity, forcing GPs to rely on continuation vehicles and forcing LPs to turn to secondary markets for portfolio rebalancing and cash access. This dual pressure—LP demand for liquidity paired with GP incentives to extend hold periods—has created a self-reinforcing market dynamic that shows little sign of abating.
Market dislocations are creating selective opportunities for sophisticated investors. Alisa Mall, chief investment officer of Michael Dell's family office (DFO Management), highlighted that recent turbulence in private-credit markets could yield attractive openings for investors equipped to navigate complexity. The $1.8 trillion private-credit market is experiencing increasing dispersion, with Mall noting that default rates are expected to rise in 2027 and 2028, creating divergent outcomes across holdings. Dell's family office has been actively bidding on secondary assets—particularly energy portfolios and other high-quality exposures trading below par—positioning for value opportunities while acknowledging sentiment-driven redemption pressures that may exceed fundamental deterioration.
The buyer base for secondaries is broadening, with retail investor participation growing materially. Evergreen 40 Act funds and other publicly listed vehicles now account for nearly one-third of secondary market fundraising, intensifying competition and supporting higher asset valuations. This expansion reflects growing institutional recognition of secondaries as a permanent feature of portfolio construction rather than a tactical cyclical tool. For investors evaluating secondaries exposure, the market offers liquidity and income potential but requires careful attention to valuation uncertainty, market cycles, and fee structures in an environment where pricing discipline and structural innovation remain central to capturing value.
The primary driver of this expansion is LP-led demand for liquidity. Limited partners increased secondary sales by roughly 35% to $120 billion as they seek alternatives to traditional fund liquidation cycles and face constraints from an extended exit drought in primary markets. Higher interest rates have compounded this pressure by reducing cash distributions and dampening M&A and IPO activity, forcing GPs to rely on continuation vehicles and forcing LPs to turn to secondary markets for portfolio rebalancing and cash access. This dual pressure—LP demand for liquidity paired with GP incentives to extend hold periods—has created a self-reinforcing market dynamic that shows little sign of abating.
Market dislocations are creating selective opportunities for sophisticated investors. Alisa Mall, chief investment officer of Michael Dell's family office (DFO Management), highlighted that recent turbulence in private-credit markets could yield attractive openings for investors equipped to navigate complexity. The $1.8 trillion private-credit market is experiencing increasing dispersion, with Mall noting that default rates are expected to rise in 2027 and 2028, creating divergent outcomes across holdings. Dell's family office has been actively bidding on secondary assets—particularly energy portfolios and other high-quality exposures trading below par—positioning for value opportunities while acknowledging sentiment-driven redemption pressures that may exceed fundamental deterioration.
The buyer base for secondaries is broadening, with retail investor participation growing materially. Evergreen 40 Act funds and other publicly listed vehicles now account for nearly one-third of secondary market fundraising, intensifying competition and supporting higher asset valuations. This expansion reflects growing institutional recognition of secondaries as a permanent feature of portfolio construction rather than a tactical cyclical tool. For investors evaluating secondaries exposure, the market offers liquidity and income potential but requires careful attention to valuation uncertainty, market cycles, and fee structures in an environment where pricing discipline and structural innovation remain central to capturing value.
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