by Amyn Hassanally, Global Head of Private Equity Secondaries | Download this article (PDF)
After a record-breaking year for secondaries volumes in 2025, with deals crossing the $200 billion threshold for the first time to reach $226 billion globally, the structural imbalance in today’s private equity market could promise something even more impressive to come.
The private equity secondaries market has a habit of turning necessity into infrastructure. What began as a way for investors to tidy up portfolios has, in the space of a few years, become an increasingly central route for liquidity, portfolio management, and dealmaking.
2025 marked a turning point for secondaries in the private markets. Transaction volumes reached $226bn, breaking through the $200bn threshold for the first time and eclipsing 2024’s previous record by more than 40%. Volumes in the first half of 2026 continued this upward trajectory, reaching a record $121bn, up from the $102bn seen in the same period in 2025.¹
That scale matters less for the bragging rights than for what it signals: secondaries are now large enough to be shaped by structural forces rather than cyclical panic.
Roughly 54% of activity in the first half of 2026 was GP-led, with the remaining 46% driven by LP-led transactions.² This near-even split between GP- and LP-led deals emphasizes just how broadly secondaries have become embedded across private markets portfolios. And with the majority of recent secondaries sellers being first-time sellers, the market looks set to continue to grow.³
The private equity market backdrop
While the private equity market has faced challenging headwinds in the last few years, some confidence has returned to the wider asset class in recent months. There has been a gradual recovery in dealmaking, company growth rates have stabilized,⁴ and there are early signs this may be having a normalizing effect on deals and exits. Although the macro environment remains volatile, there has been a growing acceptance of that market backdrop and an understanding that delaying deals in the hope that circumstances will improve carries little advantage.⁵
Overall, private equity volume was up 26% last year, with large transactions a significant driver of that volume. Volumes remained high through H1 2026, which kept pace with H1 2025.⁶
Overall, the market saw around $275 billion of activity last year.⁷ Thirteen deals with enterprise values of over $10 billion were completed in 2025, including the $57 billion Electronic Arts deal, $28 billion for Air Lease Corp, and $24 billion for Walgreens Boots Alliance.
Meanwhile, exits were up about 60%, making 2025 the strongest year recorded since 2021. H1 2026 saw continued recovery, with 25% growth year over year.⁸
But even though these numbers are large in absolute terms, the net asset value (NAV) base has also grown substantially and as of 2025 has nearly doubled from what it was in 2020.⁹ Therefore, distribution rates were only around 14% of NAV last year, the fourth straight year when this figure fell under 15%, while the previous decade’s average (2012-2021) was 18%.¹⁰ Average holding periods for buyout assets have lengthened, from 6.1 to 6.6 years,¹¹ notwithstanding the market’s positive signs, and there are thought to be around 32,000 unsold companies sitting in private equity portfolios.¹²
That equates to roughly $4.8 trillion of unrealized NAV sitting in private equity funds today, nearly double what it was in 2020.¹³ Of that, about 80% sits in funds that are four years old or older,¹⁴ past the point where LPs would normally expect some liquidity.
Even in the healthiest exit environment, this stock of mature NAV cannot be liquidated in the near term. There are only so many companies that can list or be sold in a year. This backlog accumulates, creating a durable and fairly visible pipeline for secondary transactions in the coming years.
From liquidity tap to portfolio tool
On the LP side of the secondaries market, sales are increasingly driven by active management rather than distress. Institutions are using the market to rebalance concentrated exposures, respond to leadership changes, manage denominator effects during downturns, and generate liquidity for redeployment. A growing number of pensions, endowments, fund of funds, and sovereign wealth funds now run portfolio sales on a recurring basis.
Despite record volumes, turnover remains modest relative to the size of private equity overall. Historical calculations based on secondary volumes and total NAV suggest roughly 2-3% of private equity assets trade annually in the LP market.¹⁵ Private markets remain structurally illiquid; secondaries have become the mechanism through which that illiquidity is managed.
At the same time, deal sizes have grown in tandem with institutionalization and increasing capital formation. The rise of “mega” secondary funds has created the capacity to absorb ever-larger portfolios, intensifying competition at the top end of the market. This concentration of capital has sharpened the competitive dynamics in large-cap trades, prompting some managers to focus on less penetrated segments of the market, particularly the mid-market where relationships, data scarcity, and underwriting selectivity can offer an edge.
GP-leds move into the mainstream
If LP-led secondaries reflect portfolio housekeeping, GP-led transactions speak to structural change in private equity exits. GP-leds now account for 15% of all private equity exits, up from just 8% in 2021,¹⁶ and GP-led transactions make up roughly half of the total secondaries market today (and over 50% of secondaries deal volumes in the first half of 2026).¹⁷
The GP-led market in its current form began to take shape around 2019, with 2021 delivering a surge fit for pandemic-led headlines when secondary volumes doubled compared with the year before.¹⁸ After relative stability in 2022 and 2023, growth accelerated again between 2023 and 2025. Over that period, GP-led volumes expanded at a compound annual growth rate (CAGR) of 49%, far outpacing M&A even as that market rebounded with 19% CAGR.¹⁹
The steady growth in continuation vehicle volume, even as the broader exit environment improved, also challenges the idea that continuation vehicle growth is simply a symptom of a weak exit market. Instead, it suggests that continuation vehicles are becoming a durable, structural part of how GPs manage their best assets, independent of where we are in the broader exit market cycle.²⁰
The opportunity in a nutshell
Based on these figures, the opportunity ahead for the private equity secondaries market is compelling. If the average hold period of buyout funds remains around 6.6 years, a $3.8 trillion backlog of aging NAV will need to find an exit over the next two to five years.²¹ And if GP-led transactions continue to account for around 15% of all sponsor exits by value over that period,²² we estimate that there will be around $570 billion of GP-led volumes over the next few years.²³ Should the proportion of GP-leds in the secondaries market remain around 50% (a share that has held fairly steady over the past 5 years based on our data),²⁴ then that could translate into a secondaries market for private equity assets alone of over $1 trillion cumulatively over the coming years.
Secondaries are no longer peripheral to private equity’s functioning. They have become integral to how capital is recycled, risk is managed, and ownership horizons are extended.
For investors, the market’s expansion presents both opportunity and new risks to managers. Scale has arrived. The task now is navigating it with discipline.
Why the mid-market opportunity stands out
In the last three years, the mid-market has grown to represent almost half of the overall secondaries market.25 Single-asset continuation vehicles are a significant part of that growth, and one that we believe still has considerable room to run.
Part of the opportunity is structural: some 69% of private equity dry powder is concentrated in the top 20 secondaries managers,26 and secondaries “mega” funds don’t, for the most part, run dedicated mid-market strategies. That leaves the mid-market as a comparatively underserved hunting ground for secondary transactions.
