Secondaries at a Crossroads – The Market’s Next Decade

The secondaries market has come a long way. Once a small corner of private equity defined by opportunistic buyers, it has now become a mainstream liquidity engine. With $522.5 billion raised by the top 50 firms between 2020 and 2024, deal volumes reaching $162 billion in 2024, and forecasts for $200 billion or more in 2025, the market stands at a crossroads: poised for further growth, but facing structural challenges that will shape its trajectory over the next decade.

From Niche to Mainstream

The market’s transformation is best measured in scale. Ardian’s average deal has grown from $100 million in the early 2000s to $2 billion today, with transactions of $5–10 billion now increasingly possible. Mega-funds are setting new benchmarks: Ardian closed its flagship at $30 billion in January 2025, while HarbourVest raised $15.1 billion in 2024. What was once a niche part of private markets has become a strategic financing mechanism, adopted by LPs, GPs, sovereign wealth funds, and even retail channels.

The Grand Stage: Records in 2025

The year 2025 has already proven historic. By mid-year, fundraising had reached $80.8 billion, the strongest first half ever recorded. Deal activity exceeded $100 billion in the same period, putting the market on track to break the $200 billion milestone. As PJT Park Hill’s Darren Schluter observed, “The secondaries market is on the grand stage this year.”

This moment marks a milestone in market maturity. Secondaries have stepped into a role once reserved for IPOs and M&A, carrying the weight of global liquidity needs and proving they can deliver at scale. The scale of 2025 underscores that secondaries are leading the show, anchoring the private markets ecosystem through a period of subdued exits.

The Dry Powder Squeeze

Despite strong fundraising, the market remains capital constrained. Dry powder fell from $216 billion at the end of 2024 to $171 billion by mid-2025. Investment banks project $250–300 billion of dry powder will be available within 12 months as new mega-funds close, but until then competition is fierce. The imbalance between demand and available capital has created pricing pressure, selective deployment, and execution bottlenecks that will define the near-term market environment.

LPs are the New Power Players

LPs and sovereign wealth funds are increasingly driving secondaries. Overallocated pensions use them to rebalance portfolios. Sovereigns participate actively, bringing billion-dollar portfolios to market. And even in GP-led deals, LPs act as gatekeepers, deciding whether to roll over or take liquidity.

Massive sales by LPs have institutionalized secondaries as a permanent portfolio management tool. The market’s rhythm is no longer dictated by opportunistic buyers but by large-scale institutional sellers.

Innovation on the Horizon

The future of secondaries indicate not just a bigger market but one that will be broader and more innovative. New entrants such as Accel-KKR and Leonard Green are diversifying the SI 50 ranking list and widening the competitive field. Retail capital is beginning to flow in through semi-liquid funds, democratizing access. Tech-focused strategies, like Accel-KKR’s software single-asset continuation fund, show how sector-specific vehicles can thrive.

Meanwhile, secondaries are spreading across asset classes. Beyond private equity, activity is growing in real estate, infrastructure, and private credit. This evolution suggests secondaries are on their way to becoming the central liquidity hub for the entire private markets universe.

Risks That Could Derail Growth

No market grows in a straight line. Secondaries face risks that could reshape growth trajectories. Macro shocks, like the tariff disruption of April 2025, showed how geopolitical tensions can slow dealflow, even if only temporarily. LP allocation limits, combined with slower distributions, may stretch fundraising cycles. Human capital is another challenge, with too few experienced dealmakers to manage record volumes. And as retail access expands, regulators may impose stricter oversight on transparency, valuations, and fees.

These risks do not negate the growth story but highlight the need for stronger infrastructure, deeper teams, and robust governance.

Toward 2030: The Next Five Years of Secondaries

Looking ahead, secondaries are set to embed themselves deeper into the private market ecosystem, with three themes likely to shape the next decade. Institutionalization will be the first defining feature. While mega-funds will continue to dominate headlines, the more significant shift will be the routine integration of secondaries into portfolio management, making them a core allocation for LPs rather than a tactical afterthought. The second theme will be democratization. As retail channels expand, access to secondaries will widen beyond pensions, sovereigns, and traditional institutional investors, creating a broader and more diverse investor base. Finally, diversification will drive the evolution of the market. Sector- and asset-specific vehicles are expected to multiply, carving out specialized niches in areas such as technology, infrastructure, real estate, and private credit, while coexisting with the mega-managers that anchor the industry. Together, these themes point toward a market that is not just larger, but more embedded, more inclusive, and more tailored to the varied demands of global investors.

The Market’s New Backbone

Secondaries have moved from niche to mainstream, from opportunistic trades to core allocation. They now sit at the center of private markets, offering liquidity when IPOs and M&A cannot, and providing investors with attractive risk-adjusted returns.

But the next decade will test the market’s ability to expand capital supply, manage execution bottlenecks, and innovate across asset classes. The opportunity is immense: to become the liquidity backbone not just of private equity, but of the entire private markets universe.

The crossroads is here. The path forward leads to scale, diversity, and permanence.

Brand Manager

Aayushi Thakur

Frequently Asked Questions

Q: Why is the secondaries market considered to be at a crossroads?

A: Secondaries have scaled into a mainstream liquidity engine but now face structural challenges such as dry powder shortages, execution bottlenecks, and regulatory risks that will shape the asset class’ future.

Q: How have secondaries evolved from niche to mainstream?

A: Deal sizes have grown from $100 million to multi-billion-dollar portfolios, mega-funds exceed $30 billion, and participation now spans LPs, GPs, sovereigns, and retail investors.

Q: What role do LPs and sovereign wealth funds play in shaping the market?

A: They are the biggest sellers, driving mega-deals and acting as gatekeepers in GP-led transactions, making them central to the rhythm of dealflow.

Q: What innovations are driving the next phase of secondaries?

A: New entrants, retail access via semi-liquid funds, tech-focused vehicles, and cross-asset expansion into real estate, infrastructure, and credit are broadening the market.

Q: What is the long-term outlook for secondaries by 2030?

A: Secondaries are expected to become the liquidity backbone of private markets, institutionalized in LP portfolios, democratized through retail access, and diversified across sectors and asset classes.

Sources

1. The Secondaries Investor 50: 2025.
   https://www.secondariesinvestor.com/top-secondaries-firms/
2. Jefferies H1 2025 Global Secondary Market Review
   https://www.jefferies.com/wp-content/uploads/sites/4/2025/08/Jefferies-Global-Secondary-Market-Review-July-2025.pdf?utm_term=6601147548