RESOURCES
Why Secondaries Momentum is Building in 2026
The secondary market has entered 2026 with significant momentum. In 2025, global transaction volume reached approximately US$226Bn, a 41% year-over-year increase and the surging past US$200Bn¹ just four years after breaching the US$100Bn barrier. This increase in transaction volume is not incidental, and all signs point to a shift that is unlikely to reverse.
With this intriguing growth, the key question becomes: where has this surge in volume originated, and will it continue?
Why the Growth in Secondaries Volume?
Private equity exits slowed meaningfully between 2022 and 2024 as interest rates rose and valuation expectations diverged. Although M&A activity improved during 2025, many primary investors continue to face what market participants have described as a “distribution drought”.² When investors are not receiving capital back at expected levels, portfolio rebalancing becomes difficult, and secondaries can act as a release valve.
As long as exit activity remains uneven, liquidity-driven secondary supply is likely to persist.
Continuation Vehicles are Now Mainstream
LP-led transactions have historically served as the foundation of the secondaries market, and levels still grew by 34% in 2025,1 but GP-led volume is now approaching parity.
The decline in traditional routes to exit through IPOs and M&A’s saw GP-led transactions (largely through continuation vehicles) grow by 51% compared to 2024. Recent reports showed GP-led transactions reaching US$106Bn in 2025, almost matching the US$120Bn of LP-led transactions last year.1
These continuation vehicles are now a structural feature of private markets rather than an anomaly,3 with these vehicles not only creating liquidity pathways for LPs but also opening access for investors to more mature and transparent assets.
Continuation vehicles can create opportunities for buyers and sellers, such as:
- Existing LPs can sell for liquidity.
- Rolling investors can maintain exposure.
- New investors can buy into more mature assets with shorter expected holding periods.
The Outlook for 2026
Deal flow heading into 2026 appears supported by pipeline momentum, with the backlog of deal activity entering 2026 approximately twice that of 2024, driven particularly by GP-led transactions.3
At the end of 2025, estimated dry powder in secondaries stood at approximately US$215Bn,¹ with fundraising targets for the following twelve months reportedly at $218Bn. These signals suggest a mature market, with a clear expectation that deal flow will not decline in the short term.
If anything, capital availability appears somewhat constrained relative to transaction pace¹, and for disciplined managers, that environment can create opportunities.
What Challenges Could Secondaries Face in 2026?
While many signals paint an opportunistic picture, this should be balanced with caution. Secondaries pricing depends on underlying asset performance and NAV accuracy. If economic conditions weaken materially, pricing and exit timelines could be affected. Tariff uncertainty and macro pressures are certainly factors influencing valuation and transaction dynamics in 2026.3
Also, as the market grows, competition among buyers may increase, with discounts to secondary buyers subsequently being squeezed.
Key Takeaways
Rapid growth in the secondaries market in 2025 does not appear to be an anomalous occurrence, and due to the following factors, continued expansion of the secondaries market seems likely:
- Record 2025 volume demonstrates scale and institutionalization.1
- Liquidity needs remain present.
- Continuation vehicles are now embedded in private market exit strategies.23
- Deal backlog and fundraising targets suggest sustained supply in 2026.3
How Invico Capital Corporation Engages in Secondaries
Invico Capital Corporation leverages its deep relationships and niche expertise to capture upside in illiquid and discounted funds, particularly in small-cap, illiquid hedge fund and private equity interests, where market inefficiencies and investor fatigue create compelling entry points.
Learn more about Invico Secondaries here, or contact our team to begin a discussion about upcoming opportunities.
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