Recent market volatility has underscored the value of the secondary market, where investors can seize opportunities to unlock liquidity and rebalance portfolios, showcasing its versatility and resilience amid uncertainty. As we look ahead, enterprise players are redefining strategies, adapting to new norms and uncovering previously untapped growth areas. Capital formation, a central pillar of private markets, remains a strong driver of innovation and evolution within the private equity landscape, particularly in the secondary market.
The Secondary Market's Growing Role
While Jeffries[1] estimated secondaries volume to be $162bn in 2024, with forecasts of $185bn in 2025, our recent "Secondaries in 2025: Insights for Private Equity Leaders" report, in partnership with Private Equity Wire, shows 83% of general partners (GPs) anticipate a rise in transaction volumes over the next 6鈥�12 months.
The market now holds $200鈥�250 billion in dry powder, positioning it to support much broader activity in terms of liquidity and portfolio rebalancing. Instead of being viewed as one-off decisions, secondary markets are becoming a structural tactic within institutional investors' private market strategies.
Challenges vs. Growth Opportunities
While strong headwinds like macroeconomic instability and inflation may complicate investor decision-making, they also set the stage for innovation and adaptability. Bain & Company鈥檚 2024 Outlook[2] estimates $3.2 trillion in unsold private equity assets due to liquidity challenges. This backlog, while suggesting immediate pressure, signals a significant near-term upswing in opportunities, as solutions like GP-led transactions become increasingly sophisticated and necessary.
GP-led deals, in particular, are emerging as the key driver behind secondary market expansion. The flexibility afforded by these transactions speaks directly to the needs of an economic environment marked by uncertainty. GPs are navigating the dual mandate of delivering liquidity to limited partners (LPs) while preserving long-term value creation.
The Future of Private Equity Capital Formation
Looking ahead, building more adaptable frameworks will be essential to thriving in current market conditions. Institutions are exploring innovative capital formation methods to bring greater resilience to their private equity strategies. Partnerships between GPs and LPs, for instance, play a central role in maintaining alignment and driving long-term success across portfolios.
As the need for liquidity grows, we expect more innovative ideas among investors. SS&C's technology solutions could help organizations realize efficiencies in secondaries portfolios. Why Now?
Though short-term volatility presents undeniable hurdles for private equity, it also reinforces the critical importance of forward-thinking and decision-making. For investors, the secondary market provides a clear path to balancing short-term needs with long-term potential. By embedding tools and strategies that prioritize flexibility, transparency and collaboration, organizations can make the most of these opportunities.
Stay ahead of the curve by exploring the full range of insights in SS&C鈥檚 comprehensive report. Download the "Secondaries in 2025: Insights for Private Equity Leaders" report today and discover how capital formation strategies can transform your approach to private equity in 2025 and beyond.
[1] https://www.jefferies.com/wp-content/uploads/sites/4/2025/02/Jefferies-Global-Secondary-Market-Review-January-2025.pdf__;!!JE2nyJ8!whyCkg8dY5ev2lPeZNsdO_PAu8vqt6E3J3HGVurTIP-HL7IjK05feieSzbLsPhyzXwPKC3xrNORyW-knwEgx5wjijRbu$
[2] https://www.bain.com/insights/private-equity-outlook-liquidity-imperative-global-private-equity-report-2024/
