Key Takeaways
- • Global secondary market volume reached $103 billion USD in H1 2025, a 51% increase from the prior record of $68 billion in H1 2024, positioning 2025 as a landmark year for secondaries according to Jefferies' semi-annual review.
- • Secondary investments—purchases of equity stakes from existing shareholders and fund interests from GPs or LPs—have become the primary liquidity mechanism as IPO and M&A activity remains subdued, leaving limited traditional exit pathways for venture capital investors.
- • Tough venture capital fundraising conditions and macroeconomic uncertainty have compounded the exit environment, forcing GPs to explore secondary transactions to return capital to LPs and rebalance portfolios, particularly among Canadian pension funds.
- • Northleaf Capital raised $908 million CAD for its fourth secondary fund, capitalizing on the market surge driven by persistent "zombie assets" locked in venture portfolios awaiting exits that may not materialize in the near term.
- • According to Maverix Private Equity's John Ruffolo, the structural lack of IPO and M&A liquidity is creating sustained pressure on secondary transactions, with secondary volumes likely to remain elevated as long as venture exit channels remain constrained.
Summary
The global secondary market has reached unprecedented scale as traditional exit mechanisms deteriorate. According to Jefferies' latest semi-annual review, global secondary volume hit $103 billion USD during the first half of 2025—an exceptional 51% surge from the prior record of $68 billion in H1 2024. This performance establishes 2025 as a landmark year for secondaries and reflects a fundamental shift in how institutional investors and venture funds are addressing liquidity constraints.
Secondary investments—defined as purchases of equity stakes in companies from existing shareholders including founders and employees, as well as fund interests acquired from general partners and limited partners—have emerged as the primary liquidity solution amid a prolonged exit drought. The secondary market's explosive growth is directly attributable to the sustained lack of IPO and M&A distributions that have historically provided venture capital with its primary exit channels. As macroeconomic and geopolitical uncertainty continue to suppress traditional exit activity, GPs have increasingly turned to secondary transactions to fulfill capital return obligations to their investor base.
Venture capital fundraising conditions remain challenging, compounding pressure on the secondary market. John Ruffolo, founder and managing partner at Maverix Private Equity, emphasized on the Tank Talks podcast that "the lack of IPOs and the lack of M&A is really triggering" the surge in secondary market liquidity. Ruffolo noted that Canadian pension funds are actively using secondaries to rebalance their liquidity on a regular basis, underscoring the institutional reliance on secondary mechanisms. The structural constraints facing venture exit strategies suggest sustained secondary market momentum; as Ruffolo cautioned, "there are still a lot of zombie assets sitting in venture funds," and continued VC illiquidity will perpetuate pressure on secondary transactions.
The timing has proven fortuitous for specialized secondary investors. Northleaf Capital successfully raised $908 million CAD for its fourth secondary fund, capitalizing on the market's robust expansion. This fundraising success reflects broader institutional confidence in secondaries as a distinct asset class, even as traditional private markets struggle with distribution constraints. The secondary market's record volume and continued tailwinds from venture illiquidity position secondaries as a structural feature of the institutional investment landscape rather than a temporary phenomenon.
Secondary investments—defined as purchases of equity stakes in companies from existing shareholders including founders and employees, as well as fund interests acquired from general partners and limited partners—have emerged as the primary liquidity solution amid a prolonged exit drought. The secondary market's explosive growth is directly attributable to the sustained lack of IPO and M&A distributions that have historically provided venture capital with its primary exit channels. As macroeconomic and geopolitical uncertainty continue to suppress traditional exit activity, GPs have increasingly turned to secondary transactions to fulfill capital return obligations to their investor base.
Venture capital fundraising conditions remain challenging, compounding pressure on the secondary market. John Ruffolo, founder and managing partner at Maverix Private Equity, emphasized on the Tank Talks podcast that "the lack of IPOs and the lack of M&A is really triggering" the surge in secondary market liquidity. Ruffolo noted that Canadian pension funds are actively using secondaries to rebalance their liquidity on a regular basis, underscoring the institutional reliance on secondary mechanisms. The structural constraints facing venture exit strategies suggest sustained secondary market momentum; as Ruffolo cautioned, "there are still a lot of zombie assets sitting in venture funds," and continued VC illiquidity will perpetuate pressure on secondary transactions.
The timing has proven fortuitous for specialized secondary investors. Northleaf Capital successfully raised $908 million CAD for its fourth secondary fund, capitalizing on the market's robust expansion. This fundraising success reflects broader institutional confidence in secondaries as a distinct asset class, even as traditional private markets struggle with distribution constraints. The secondary market's record volume and continued tailwinds from venture illiquidity position secondaries as a structural feature of the institutional investment landscape rather than a temporary phenomenon.
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