At a recent Commonfund Forum session, Ethan Levine, Head of Secondaries at CF Private Equity, sat down with David Markson, Senior Managing Director at Evercore's Private Capital Advisory Group, and George Wu, Managing Director, Secondaries at CF Private Equity. Together, they discussed the factors fueling the rapid growth of the private equity secondaries market, examined emerging opportunities and existing constraints, and considered the outlook for the sector over the coming years. Their conversation highlighted that, despite its current momentum, the market remains in its early stages, with significant potential for further development.
What follows are the key insights from that conversation.
A Market Growing Faster Than the Capital to Fund It
The secondary market hit $226 billion in deal volume last year — a 40 percent jump from the prior year, which was itself a record. The market has grown at a roughly 22 percent CAGR over the last several years (yet it still represents only 1-2 percent of total private capital AUM), and projections point toward $500 billion in annual volume within five years. The paradox: despite this growth, the market remains structurally undercapitalized. Available dry powder covers barely one year of deal volume, against a typical two-to-four-year investment period for secondary funds. In most markets, scarcity of capital would depress seller activity — but because today's sellers are not distressed, they simply wait, which naturally regulates growth.
LP Led vs. GP Led: Two Very Different Animals
LP (Limited Partner) led transactions are seller-initiated — a LP brings a portfolio of fund interests to market, typically triggered by over allocation, team changes, or a desire to rebalance. GP (General Partner) led transactions are GP initiated, most commonly used to retain a high-performing "crown jewel" asset in a continuation vehicle rather than selling it to a competitor. Ten years ago, GP-led deals carried a stigma — they signaled zombie funds and unsellable assets. Today, they are a legitimate portfolio management tool that gives LPs the option of liquidity or continued participation.
Repeat Sellers Are Reshaping Demand
Roughly half of all sellers today are repeat participants — LPs who have moved past the one-time catalyst transaction and now use the secondary market as a routine portfolio management tool, rebalancing allocations on a regular or even quarterly basis. Yet, still the market of willing sellers continues to grow as about half of the sellers are testing the market for the first time and could be repeat sellers down the road. This structural shift in seller behavior is a meaningful driver of market growth independent of distressed cycles.
Pricing Is Highly Situational — and Moving Fast
Broad pricing ranges exist by category: recent U.S. and European buyout funds trade in the low-to-mid 90s as a percentage of NAV; tail-end funds drop into the 70s or lower; venture shows enormous dispersion, averaging around 70 but ranging from near zero to above par depending on GP quality and vintage. Critically, pricing can shift dramatically in a short time — software buyout funds, which were trading at more elevated levels just weeks before the panel, had already seen pricing drop by ten percentage points. The secondary market moves faster than many participants expect.
Fewer Buyers in More Places
Consolidation among large buyers has created an unexpected opportunity at the smaller end of the market. As mega-funds pursue ever-larger transactions, the middle and lower-middle market has grown less competitive, more negotiable, and in many cases more attractively priced. Specialist strategies — by asset class, geography, fund vintage, or structure — are filling that gap. The secondary market is no longer a monolith; it's a collection of distinct submarkets that rarely overlap.
AI as a Force Multiplier
The most immediate applications of AI in this market are not transformational — they are operational. Faster onboarding of fund data, quicker first-draft models, scenario analysis that once took weeks now taking hours. But the longer-term potential is more significant: smaller, nimbler buyers gaining the analytical bandwidth of much larger platforms; advisors predicting buyer behavior with greater accuracy before a process launches; and the entire market operating with better information, faster. The gap between large and small participants may narrow considerably as these tools mature.
Where It Goes From Here
Both panelists agreed: the market is likely heading toward $500 billion in annual volume within the next few years, driven by continued LP adoption, the growth of evergreen and 40 Act¹ vehicles bringing new pools of capital, and the maturation of GP led as a mainstream strategy. The bolder call: a single secondary transaction exceeding $10 billion will get done within three years. The limiting factor throughout will remain capital — not seller motivation.
1. https://www.investopedia.com/terms/i/investmentcompanyact.asp
