Key Takeaways
- • Korean institutional investors have made secondary private equity strategies their top choice for PE allocation for two consecutive years, driven by a liquidity crunch and demand for downside-protected credit exposure at discounted valuations.
- • Global secondaries market reached a record $226 billion in transaction volume during 2025, representing 41% year-over-year growth, indicating sustained LP appetite for this asset class as credit valuations compress.
- • Mid-market PE secondaries are experiencing increased demand from LPs seeking diverse investment opportunities, with Pantheon's $3.25 billion fund exemplifying the scale and institutional backing behind this strategy shift.
- • Korean LP capital has become highly valued by international general partners, with a growing number of GPs establishing Seoul offices to access this institutional investor base directly.
- • The secondaries strategy addresses multiple LP pain points simultaneously: providing liquidity in constrained environments, offering credit exposure with protective characteristics, and delivering mid-market diversification amid broader market uncertainty.
Summary
South Korean institutional investors have substantially shifted allocation strategy toward private equity secondaries, establishing this approach as their primary PE investment focus for the second consecutive year. This pivot reflects a deliberate response to liquidity pressures facing Korean institutional capital and the appeal of credit secondaries as a defensive investment vehicle offering both discounted entry points and built-in downside protection mechanisms.
The global secondaries market demonstrates robust structural demand underpinning this Korean LP appetite. The asset class achieved $226 billion in transaction volume during 2025, a 41% year-over-year increase according to Evercore Private Capital Advisory data, establishing new record levels for market activity. This expansion signals that LP preference for secondaries has moved beyond tactical repositioning into sustained, fundamental demand.
Mid-market focus within the secondaries strategy has emerged as a particular draw for institutional investors. Pantheon's $3.25 billion secondaries fund exemplifies institutional capital's concentration on mid-market opportunities, offering LPs diverse exposure across companies and strategies while maintaining the protective characteristics that credit secondaries provide. This segment addresses LP demand for portfolio breadth without requiring deployment of capital into large-cap stakes.
Korean institutional capital has become notably prized among international general partners, with a measurable increase in GP office openings in Seoul reflecting efforts to access this investor base directly. This institutional demand has created a competitive dynamic where leading alternative asset managers prioritize Korean LP relationships and regional presence, indicating the meaningful scale and strategic importance of this investor class.
The convergence of Korean LP liquidity needs, global credit valuation compression, and proven secondaries market growth creates a sustained tailwind for this strategy. For Korean institutions, secondaries provide a mechanisms to maintain PE exposure and generate returns while addressing operational constraints—a particularly valuable positioning given broader macro uncertainty in credit markets.
The global secondaries market demonstrates robust structural demand underpinning this Korean LP appetite. The asset class achieved $226 billion in transaction volume during 2025, a 41% year-over-year increase according to Evercore Private Capital Advisory data, establishing new record levels for market activity. This expansion signals that LP preference for secondaries has moved beyond tactical repositioning into sustained, fundamental demand.
Mid-market focus within the secondaries strategy has emerged as a particular draw for institutional investors. Pantheon's $3.25 billion secondaries fund exemplifies institutional capital's concentration on mid-market opportunities, offering LPs diverse exposure across companies and strategies while maintaining the protective characteristics that credit secondaries provide. This segment addresses LP demand for portfolio breadth without requiring deployment of capital into large-cap stakes.
Korean institutional capital has become notably prized among international general partners, with a measurable increase in GP office openings in Seoul reflecting efforts to access this investor base directly. This institutional demand has created a competitive dynamic where leading alternative asset managers prioritize Korean LP relationships and regional presence, indicating the meaningful scale and strategic importance of this investor class.
The convergence of Korean LP liquidity needs, global credit valuation compression, and proven secondaries market growth creates a sustained tailwind for this strategy. For Korean institutions, secondaries provide a mechanisms to maintain PE exposure and generate returns while addressing operational constraints—a particularly valuable positioning given broader macro uncertainty in credit markets.
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