At a recent private markets conference in Paris, Blackstone’s CEO Stephen Schwarzman said private equity “has just been too successful. Institutions have made so much money that all of a sudden they’ve exceeded their expected exposure.” As a result, cash-constrained investors are looking to the secondary market to sell some of their exposure.

But has the secondary market reached its golden age? “Not just yet,” says Nick Lawler, our head of secondaries. Buyers predict annual deal volume growth from a $100 billion market today, to $250 billion on the low end, and $1 trillion+ on the high end, depending on who you ask. Regardless of which number you believe, market participants agree there are two constraints restricting secondaries from reaching its full potential: human capital and actual capital.

The human capital element will take time to address. “It is incumbent on everyone working in private equity – buyers, advisors, GPs – to educate the next generation of talented individuals about the opportunity to build and grow careers in secondaries,” Lawler says. Today, working in secondaries is very much an attractive and viable alternative to joining a direct buyout firm.