The Rise of Secondaries Market Globally

For decades, private markets were built around the long-term illiquidity premium: investors locked up their capital and waited years, sometimes a decade, before seeing it again. But in the last few years, secondaries have emerged to become one of the most dynamic corners of private markets. Once a niche trading market dominated by opportunistic buyers of limited partner (LP) stakes, the secondaries market has evolved into a mainstream financing mechanism, unlocking liquidity, reshaping fund structures, and enabling capital to flow more efficiently.

This transformation is now undeniable. According to the Secondaries Investor 50: 2025 ranking, the top 50 firms raised $522.5 billion between 2020 and 2024, a 10.3% increase from the 2019-2023 period. Deal volumes, too, have surged, hitting ~$160 billion in 2024, with projections suggesting 2025 could break the $200 billion barrier for the first time.

From $100 Million Trades to $10 Billion Portfolios

Scale has been the clearest marker of the market’s maturation. Ardian, the perennial leader in secondaries, has seen deal sizes expand from $100 million in the early 2000s to an average of $2 billion today. Its record-breaking latest fund closed at $30 billion in January 2025, underscoring investor appetite for mega-funds.

This is a far cry from the secondaries market of 15 years ago, when small opportunistic trades defined the landscape. Today, entire pension portfolios trade hands in single transactions, with secondaries managers acting as liquidity providers at scale.

Fundraising Momentum: Breaking Records Year After Year

The secondaries fundraising cycle has been nothing short of extraordinary. In 2023, the market raised $123.9 billion, setting a record. By the first half of 2025, $80.8 billion had already been raised, 90% higher than the previous H1 record set in 2023.

The momentum is fueled by a confluence of market forces. With IPOs and M&A slowing, limited partners are starved of distributions. GPs are exploring continuation vehicles to extend ownership of prized assets. And investors, in search of private equity-style returns with a credit-like risk profile, see secondaries as a compelling allocation.

Why Investors are Turning to Secondaries

At its core, the appeal of secondaries lies in its dual role as a liquidity solution and an arbitrage opportunity. One of the most important functions is its role as a liquidity provider in a frozen exit market. With global IPOs slowing and private M&A pipelines thinning, secondaries give investors a way out. GP-led continuation funds, once rare, are now mainstream, enabling managers to hold high-performing assets longer while giving LPs optional liquidity.

Secondaries are also attractive from a risk-reward standpoint. They have historically generated private equity-level returns while carrying a more credit-like risk profile. Buying assets partway through their lifecycle reduces blind-pool risk and offers clearer visibility into company performance.

Finally, the participation of large institutions has given the market credibility and depth. The biggest LPs, from pension funds to sovereign wealth funds, are increasingly the participants in secondaries transactions, reshaping market dynamics. This institutional activity has normalized the use of secondaries, shifting perceptions from opportunistic trading to mainstream portfolio management.

The Dry Powder Challenge

But the very success of secondaries has created a bottleneck: a shortage of capital relative to dealflow. Dry powder stood at $216 billion at the end of 2024, but fell to $171 billion by H1 2025 as deal activity accelerated. This drop highlights the paradox of the market: while demand for liquidity has never been stronger, the pace of dealmaking is outstripping the availability of capital. Larger and more complex transactions require greater reserves, and with mega-deals regularly in the $5–10 billion range, even the biggest managers are deploying their funds faster than they can raise them.

At the same time, the investor base is expanding. New entrants are coming to market, retail channels are beginning to play a role, and established giants are back with record-setting vehicles. Investment banks expect that this combination of factors will replenish the supply of capital, with projections of $250–300 billion in dry powder over the next 12 months.

The outlook is encouraging. While temporary mismatches between dealflow and capital availability create short-term pressures, they also highlight the vitality of the market. As fundraising catches up, and with a broader mix of investors entering the space, the secondaries market is building the capacity it needs to sustain long-term growth. The shortfall of today is setting the stage for a stronger, deeper, and more balanced market tomorrow.

Risks on the Horizon

While momentum is strong, challenges remain. An exit drought, where slower distributions constrain LPs from making new commitments, continues to pressure the market. Geopolitical shocks, such as U.S. tariff disruptions in early 2025, have demonstrated how sensitive dealflow can be to external events. And with deal volumes surging, firms are stretched thin on experienced staff, creating human capital constraints.

Yet secondaries have historically shown a unique resilience. In fact, periods of uncertainty often highlight the strategic importance of the market. When traditional exits stall, secondaries step in to provide liquidity; when volatility rises, buyers find opportunities to acquire quality assets at attractive valuations. The very features that might slow other parts of private equity, including illiquidity, valuation gaps, and extended holding periods, create the conditions in which secondaries can thrive.

As a result, even in moments of uncertainty, secondaries deal activity resumes quickly as liquidity needs remain ever-present, and the space often shines brightest when other parts of the market struggle to adapt.

From Liquidity Tool to Core Allocation

Secondaries are now at the center of private market activity, providing vital liquidity in an environment where traditional exits are scarce. With annual deal volumes approaching $200 billion and mega-funds at $30 billion, the question is no longer whether secondaries are mainstream but how central they will become to institutional portfolios.

The coming years will likely see secondaries evolve even further, embracing retail capital, expanding across asset classes, and institutionalizing as a core private markets allocation. In an era defined by illiquidity, secondaries may prove to be the market’s great equalizer.

Research Analyst

Simran Mehla

Frequently Asked Questions

Q: Why has the secondaries market grown so quickly in recent years?

A: The market’s rapid growth is driven by slower IPO and M&A activity, which has created a need for liquidity solutions. At the same time, secondaries provide investors with attractive risk-adjusted returns and transparency, making them a compelling option in uncertain environments.

Q: How do secondaries provide liquidity in private markets?

A: Secondaries allow LPs to sell fund stakes or participate in GP-led continuation vehicles, unlocking liquidity without waiting for traditional exits. This enables investors to recycle capital while giving GPs flexibility to hold high-performing assets longer.

Q: Why are secondaries considered resilient in times of uncertainty?

A: Unlike IPOs or M&A, which depend on favorable market conditions, secondaries are solutions-driven. They shine in volatile environments by offering liquidity when other options close and by enabling buyers to acquire assets with greater visibility and, often, at attractive valuations.

Q: How is the secondaries market expected to evolve in the future?

A: The market is likely to grow in scale and scope, with new entrants, retail access through semi-liquid funds, and sector-specific strategies. Beyond private equity, secondaries are expanding into real estate, infrastructure, and private credit, positioning themselves as the liquidity hub of private markets.

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