The Global Secondary Market in 2025–2026: From Liquidity Valve to Core Market Infrastructure

The global private-markets secondary market has crossed a historic threshold. Once viewed as a niche liquidity tool, it has now become core financial infrastructure for limited partners (LPs), general partners (GPs), and increasingly, retail and evergreen capital. Jefferies’ January 2026 review documents a market that is not merely growing—but structurally transforming.

1. Record Volumes Signal Structural, Not Cyclical, Growth

In 2025, global secondary transaction volume reached $240 billion, a 48% year-over-year increase and the largest year ever recorded.

Importantly, more than half of this activity occurred in the second half of the year, indicating accelerating momentum rather than a one-off surge.

This growth was driven by two equally powerful forces:

• Persistent liquidity pressure in a low-distribution environment
• Unprecedented capital availability dedicated to secondaries

Unlike prior cycles, this expansion occurred alongside improving exit markets, confirming that secondaries are no longer a fallback mechanism but a preferred portfolio-management strategy.

Example: Even as IPOs and sponsor-backed M&A rebounded in H2 2025, GP-led secondaries still represented 14% of all sponsor-backed exit volume, up from 13% in 2024.

2. LP Secondaries: Liquidity, Rebalancing, and Repeat Usage

LP-driven transactions accounted for $125 billion (52%) of total market volume in 2025. The dominant motivation was portfolio rebalancing, not distress.

Key insights include:

• ~60% of sellers were repeat users, confirming secondaries as a recurring tool
• Pension funds and sovereign wealth funds led volume (34%), followed by fund-of-funds and endowments
• Family offices increased participation to 5% of volume, signaling broader adoption beyond institutions

Example: Endowments and foundations accelerated selling activity ahead of potential tax-policy changes, using secondaries proactively rather than reactively.

3. Pricing Remains Resilient—but Increasingly Discriminating

Despite record volumes, pricing remained strong, with average LP portfolio pricing at 87% of NAV, only modestly below 2024 levels.

However, the report highlights clear pricing bifurcation:

• Younger vintages (<5 years): ~95% of NAV
• Mid-life funds (2015–2018): strongest demand
• Tail-end funds (10+ years): ~73% of NAV

By strategy:

• Buyout: ~92% of NAV, still the highest-priced segment
• Credit: ~91% of NAV, supported by yield and rate protection
• Venture/Growth: ~78% of NAV, improving sharply due to AI-driven exits
• Real Estate: ~70% of NAV, reflecting financing costs and office-sector headwinds

Insight: Pricing discipline has increased—but capital depth has prevented systemic discounting.

4. GP-Led Secondaries Become the Market’s Growth Engine

GP-led transactions reached $115 billion, growing 53% YoY and accounting for 48% of total secondary volume. Continuation vehicles (CVs) dominated, representing 89% of GP-led activity.

What changed structurally:

• 78 of the top 100 global sponsors by AUM have now executed at least one CV
• CVs are no longer perceived as “last-resort solutions,” but as strategic value-maximization tools
• LP rollover rates increased to ~15%, reflecting growing comfort and sophistication

Example: Large single-asset CVs exceeding $3 billion closed successfully in 2025—transactions that would have been impractical just a few years ago.

5. Bigger Checks, Bigger Deals, and Specialized Buyers

Capital formation reached unprecedented levels:

• $327 billion of dedicated secondary dry powder
• $477 billion when including traditional LP and retail capital.

This capital depth has enabled:

• A 57% increase in $1B+ GP-led deals
• Larger lead-investor commitments (84% of buyers expect check sizes to rise)
• The rise of direct-style secondary investors focused on single-asset, sector-specialist underwriting

Insight: The secondary buyer universe now mirrors primary markets—specialized, thematic, and increasingly fundamental in approach.

6. Structured Solutions Are Now Mainstream

Both LP and GP-led transactions increasingly rely on bespoke structuring, including:

• Deferred purchase prices
• Earn-outs
• Preferred equity
• NAV loans and affiliate SPVs

In 2025:

• ~23% of LP deals
• ~29% of GP-led deals

used structured components, often improving pricing by 300+ basis points versus all-cash outcomes.

Example: Sellers accepted partial deferrals (3–24 months) to achieve higher headline pricing while preserving GP relationships and upside exposure.

7. Credit, Venture, and Real Assets Drive the Next Phase

While buyout remains dominant (70% of GP-led volume), the fastest growth came from:

• Credit secondaries, especially GP-led direct-lending portfolios
• Venture/Growth, fueled by AI, cloud, and enterprise software demand
• Real assets, including energy and digital infrastructure CVs

These segments benefit from longer hold periods, yield orientation, and structural alignment with continuation vehicles.

8. Evergreen and Retail Capital Are Redefining Market Dynamics

Evergreen vehicles emerged as the fastest-growing source of secondary capital, with an estimated $113 billion of inflows in 2025 and over 40% allocated to secondaries.

Their impact:

• Faster execution and pricing support
• Increased absorption of tail-end assets
• A shift from pure IRR optimization toward MoIC-driven value creation

Long-term implication: Even modest retail reallocation into alternatives represents trillions in potential inflows, positioning secondaries as the primary beneficiary.

9. 2026 Outlook: Toward a $300 Billion Annual Market

Jefferies projects that, based on backlog alone, H1 2026 should exceed $100 billion, with a clear path toward $300 billion annual volume within 12–24 months.

The drivers are structural:

• Companies staying private longer
• Institutional normalization of CVs
• Permanent capital vehicles scaling
• Sophisticated portfolio-management needs across generations of capital

Final Takeaway: Secondaries as Strategic Capital Architecture

The global secondary market has evolved into a core pillar of private-capital strategy, enabling liquidity, alignment, and value preservation simultaneously. For LPs, GPs, family offices, and long-term stewards of capital, secondaries are no longer tactical—they are architectural.

As Jefferies’ 2026 outlook makes clear, this market is not cooling—it is professionalizing, specializing, and scaling into permanence

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