The secondary market has always been about liquidity—but today, we are witnessing an unprecedented logjam, with nearly 30,000 private portfolio companies holding over $3tn in net asset value that need to, or should, be sold. With LPs facing the worst distribution years since the Global Financial Crisis, managers are under pressure to provide liquidity.
What’s driving the shift?
- The rise of GP-led transactions—once a niche segment, now nearly half of the market.
- Continuation vehicles have emerged as a crucial liquidity tool, allowing managers to extend asset holding periods while still delivering liquidity.
- The secondary market is poised for non-linear growth, with embedded value across NAV and commitments estimated at $20tn.
At Capital Dynamics, we believe success in this evolving market depends on:
- Leveraging deep investment insights to identify opportunities beyond the auction market
- Prioritizing strong GP relationships to access high-quality transactions.
- Focusing on smaller, fragmented deals, where sourcing and bilateral negotiations create value.
As the secondary market matures, differentiation will be key. With the right expertise, relationships, and investment strategy, there is plenty of opportunity ahead.
To learn more, you can read the Private Equity Wire report that interviewed Joseph B. Marks, Senior Managing Director and Head of Secondaries.
Report available here
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