Private equity secondaries: from niche to necessary

The secondary private equity (PE) market has entered a new era – one defined by scale, sophistication and structural permanence. With $240 billion of transaction volume in 2025, up nearly 48% over the prior year's record of $162 billion¹, and GP-led transactions becoming a major liquidity tool across private markets, the opportunity set for secondary investors has never been larger or more diverse.

For asset allocators seeking return enhancement, portfolio diversification and improved liquidity management within their private markets programmes, secondaries represent one of the most compelling opportunities available today.

But in a market defined by complexity and uncertainty, where alpha can be generated by relationships, experience and rigorous underwriting, we believe manager selection is not a secondary consideration. It is a primary one.

Structural tailwinds that endure

We believe the secondary market's rise is not a cyclical phenomenon. It is underpinned by durable, long-term structural forces.

The sheer scale of PE creates an ever-expanding opportunity set. The combined NAV of private market funds reached $14.5 trillion by the end of 2024 – nearly double the $7.4 trillion recorded in 2019² – creating a vastly larger pool of assets with the potential to be offered into the secondary market. As this NAV grows, so too does the supply of secondary investment opportunities. Despite the secondary market growing approximately fourfold since 2014, secondaries trading remains low at just 1% to 2% of total private markets NAV². Even a modest increase from these low turnover levels would have a substantial impact on transaction volume – and as LPs become more active in managing their private markets holdings, and GPs more sophisticated in managing investor cash-flow needs, that proportion is likely to rise regardless of the broader exit and liquidity environment.

GP-led secondaries have been the defining growth driver. A segment that barely existed 10 years ago now represents nearly half of all secondary transaction volume – growing at a 30% CAGR from 2017 to 2025¹. This is not a temporary trend. It reflects a fundamental and permanent shift in how PE sponsors manage their portfolios, create liquidity for investors and extend ownership in their high conviction assets. In 2025, continuation vehicles represented 14% of all sponsor-backed exit volume¹, cementing their status as a permanent fixture in private markets.

From a buyer’s perspective, GP-led transactions offer compelling investment opportunities: the ability to invest alongside a GP in their best assets, with years of performance history already on the table, at valuations that reflect a liquidity premium rather than a full change-of-control price. GPs typically invest significant personal capital into the transaction alongside secondary buyer, creating strong alignment of interest.

Why now could be an attractive entry point

Beyond the structural case, we believe the current market environment presents a favourable window for new secondary capital.

In recent years, exit pathways – IPOs, M&A and sponsor-to-sponsor sales – have been severely constrained. PE exit activity remains more than 50% below 2021 peaks, and distributions as a percentage of NAV have fallen to historic lows³.

With liquidity pressure mounting and portfolios overallocated to illiquid assets, there is a growing cohort of motivated sellers and attractive opportunities for buyers. Macroeconomic uncertainty – including geopolitical tensions, tariff risk and equity market volatility – is also expected to widen discounts and increase motivated selling, particularly among LPs with near-term liquidity needs⁴.

The secondary market also remains significantly undercapitalised, creating attractive supply-demand dynamics.

Secondary dry powder stands at approximately $215 billion, representing roughly one year of transaction volume⁵ – a fraction of the three-to-four years of coverage typical in the primary market.

For context, secondary fundraising has been stronger than other private asset classes with closed-end secondary vehicles representing 18% of all private capital raised in 2025, up from just 7% in 2021¹. However, supply of transactions continues to outpace capital formation.

Attractive choice for asset allocators

For investors, the case for secondaries extends beyond return potential. Secondaries can offer a distinct set of portfolio construction advantages that are difficult to replicate through primary fund investing.

Secondary investments begin with assets already in motion, compressing the J-curve and delivering faster, more visible paths to distribution than primary fund commitments can offer.

A single secondary fund will invest in multiple underlying funds across multiple vintages and industries – providing immediate diversification that would take a primary programme years, and multiple commitment cycles, to replicate.

Also, buyers are not making blind bets. Secondary investments are underwritten against real assets, real financials and real GP track records – replacing the uncertainty of a primary commitment with informed, asset-level conviction.

Taken together, we believe these attributes can make secondaries uniquely additive in a diversified private markets programme – not merely as a return enhancer, but as a tool for managing risk, pacing and portfolio resilience. For investors, secondaries increasingly serve not as a satellite exposure but as a core component of a well-constructed private markets programme.

Manager selection: a primary consideration for generating alpha

Access to the secondary market is not itself a strategy. In our view, how one participates matters enormously.

Neuberger Berman's secondary team brings nearly 30 years of experience navigating various market cycles – building a track record of successfully sourcing, leading and executing attractive secondary transactions.

Underpinning that track record is the breadth of Neuberger's private markets platform. With over $155 billion in AUM⁶ spanning primary fund investing, secondaries, co-investment, private debt and capital solutions, Neuberger maintains extensive GP and LP relationship networks and deep private market knowledge and insight. The significant scale of the Neuberger platform is evident, with over $35 billion of capital committed to private market transactions over the past three years⁷.

We believe this combination of experience and platform translates directly into successful execution – and in a market defined by uncertainty, those qualities are what translate opportunity into outcomes.

_{Sources
1 - Jefferies, Global Secondary Market Review, Private Capital Advisory, January 2026.
2 - Jefferies, Secondary Market Update, Private Capital Advisory, March 2025.
3 - PitchBook Data, Inc., as of Q1 2025.
4 - Campbell Lutyens, Secondary Market Overview Report – Full Year 2025, 2026.
5 - Evercore Private Capital Advisory, 2025 Secondary Market Report, February 2026.
6 - As of December 31, 2025. Aggregate Committed Capital represents total commitments to active vehicles (including commitments in the process of documentation or finalization) managed by NB Private Markets.
7 - Represents opportunities reviewed, made and committed to across primaries, co-investments and secondaries by NB Alternatives from 2023 – 2025 for PIPCO and Secondaries.}  

_{Note: the views and opinions expressed herein are those of the author and may not reflect those of Neuberger as a whole. Neuberger paid a fee to AsianInvestor to publish this article, but such compensation does not constitute an affiliation or endorsement. This article is not to be construed as an investment recommendation, nor indicative of the past or future performance of any Neuberger product or service.}