Over the past two decades, the private equity secondaries market has quietly expanded into one of the highest growth, yet still niche, areas of alternative investments. From 2002 to 2022, global secondary market volume scaled from $2 billion to over $100 billion in transaction value – a 50x growth rate. GP-led transactions now account for nearly half of the annual market volume.

“While large on an absolute basis,” reports our head of secondaries, Nick Lawler, “the private equity secondary market is de minimis compared to the $10 trillion in outstanding alternative investment assets under management. At the same time, secondary market dry powder of $139 billion remains at the lowest relative levels seen over the past two decades. That level is less than 1.5x annual deal volume, versus historical averages of 2-2.5x.”

The secondary market has not only scaled but widened. For most of the 2000 to 2010 decade, the market was mostly focused on purchases and sales of LP interests in private equity funds, often where investors needed liquidity. Since then, it has become both a technology and tool for GPs and LPs to manage portfolio and liquidity issues, including navigating concentrated exposures, extending the duration of top-performing assets, and wind-down tail-end positions.