Piper Sandler's secondary-advisory bet on private equity

THE SECONDARY market for private equity is booming, and Piper Sandler is trying to be the broker.

Over the past year the Minneapolis-based investment bank has been acquiring talent at a clip that would have seemed eccentric not long ago. In August 2024 it bought Aviditi Advisors, a boutique alternative-investment bank, to form its private-capital-advisory group. In June 2025 it poached Andy Nick, a managing director from Jefferies, to co-head that group's secondary-capital-advisory practice. Then, on August 19th, it hired Tim Light, formerly of Guggenheim, as managing director of the same desk. Mr Light helped found and grow Guggenheim's secondary-advisory practice; Mr Nick did the same at Jefferies. Two hires, two banks, the same job.

The pattern is deliberate. Piper Sandler is building a secondary-advisory franchise through the same playbook that has worked elsewhere in its business: aggressive headcount growth, advice-led revenue and minimal balance-sheet risk. It is a capital-light strategy in an industry still dominated by capital-heavy firms. And, if recent earnings are any guide, it is paying off.

The secondary market has given the firm a tailwind. Transaction volume reached roughly $240bn worldwide in 2025, up almost 50%, according to Jefferies. Half of that came from GP-led deals — in which a private-equity sponsor retains ownership of one or more portfolio assets through a continuation vehicle, offering existing investors the option to sell or stay in. These deals alone have grown at an annual compound rate of roughly 26% since 2019, says Hamilton Lane, one of the largest secondary platforms. Companies are staying private for longer; sponsors need more flexible ways to manage fund duration and offer liquidity without full exits. The result is a market that looks less like a niche and more like a permanent fixture of private-capital infrastructure.

Piper Sandler has positioned itself to take advisory fees from the middle of this trade. Its private-capital group, built on the Aviditi acquisition, says it has been involved in more than 70 GP-led transactions and covers over 5,000 limited partners (the institutional investors who fund private-equity funds). The advisory model is attractive on paper. Fees come from structuring and executing transactions, sourcing capital and advising both sides of the deal. The firm does not need to deploy its own equity, carry interest-rate risk or maintain large underwriting lines. A senior advisor with the right relationships can generate revenue at a fraction of the cost of a traditional underwriting desk.

For Piper Sandler, that model has coincided with a period of impressive growth. The bank reported its 11th consecutive quarter of year-over-year revenue growth when it released second-quarter 2026 results on July 30th. Revenue for the quarter was $496m, up 22% from a year earlier; adjusted earnings per share of $1.04 beat consensus by roughly 18%. Full-year 2025 advisory-service revenues, as reported in the annual report, were up 28%, outpacing the firm's peer group. The stock, trading around $75, commands roughly 16 times earnings, not far off the multiples awarded to larger bulge-bracket rivals.

Yet the strategy carries a vulnerability that the market may be underpricing. Secondary advisory is a relationship business with a relatively low barrier to entry. The same people Piper Sandler is hiring could, in theory, join any bank and bring the same client book. The firm is betting that its culture, its existing relationship base and its willingness to pay for talent will outlast the interest of bigger competitors. So far that bet has held. But the secondary market is attracting new entrants of every stripe, from semi-liquid vehicles to evergreen funds that channel retail capital into GP-led deals. If larger banks decide that secondary advisory merits the same resources as M&A or capital markets, Piper Sandler's first-mover advantage in its segment could erode quickly.

To be sure, the firm has some defensible ground. It covers a large portion of the limited-partner base and has built an integrated platform that combines fundraising, secondary solutions and direct-investment capital-raising. The Aviditi team brought scale that few mid-market banks could match; the private-capital group has been involved in capital-raises totalling more than $500bn. In a market where trust and long-standing relationships matter more than balance-sheet size, that is a genuine advantage.

But the deeper question is whether advisory fees in secondary markets will stay fragmented or gradually consolidate. In most areas of investment banking, consolidation has been the norm. M&A advisory, once scattered across boutiques, is dominated by a handful of global banks. Equity capital markets follow a similar pattern. Secondary advisory is different — deals are smaller, more numerous and less amenable to standardisation. A GP-led continuation vehicle for a middle-market healthcare portfolio is not the same as a block trade in a large-cap tech fund. That heterogeneity is what protects boutiques, for now.

The structural evidence on supply and demand favours continued activity, at least in the near term. Dedicated secondary-market capital reached a record $327bn in 2025, says Jefferies, and the top 10 investors accounted for only half of transaction volume, suggesting the buyer base is still broadening rather than concentrating. Hamilton Lane puts the unfunded-capital-to-volume ratio at roughly 1x, meaning buyers barely have enough powder to cover one year's worth of deal flow. If deal flow truly outstrips available capital, as Hamilton Lane claims, the advisory bottleneck shifts from pricing to execution — and that is where a well-staffed advisory team can earn fees.

What should investors make of the valuation? AInvest's aggregate signal labels Piper Sandler a buy, and consensus estimates for the second half of 2026 imply continued earnings momentum. The firm's next reported quarter will be the third of calendar 2026, in early 2027. The consensus EPS estimate for that quarter is roughly $0.81, down from $1.04 in the second quarter, reflecting seasonality. On a forward basis, the stock trades at a multiple that assumes growth holds. The valuation is not cheap, but it is not stretched in absolute terms either. The relevant risk for investors is not a cyclical dip but whether the advisory model can sustain its margin profile as competition intensifies.

The broader lesson is worth noting. Piper Sandler's push into secondary advisory is a microcosm of how mid-market banks are trying to grow in an era when traditional fee income is under pressure. M&A volumes are volatile. IPO windows open and shut. Advisory businesses built on relationships and execution offer a steadier, if less glamorous, source of revenue. The strategy is sound — so long as the firm can keep hiring as fast as it has been and so long as the secondary market does not become commoditised.

Better to build a franchise on advice than on balance-sheet leverage. But in finance, the most attractive models are also the easiest ones to copy.