Private Secondaries Market: Navigating Opacity to Unlock $200B+ Opportunities

The Private Secondaries Market has emerged as a cornerstone of the global private capital ecosystem, with total transaction value in Q3 2025 reaching $165 billion-a figure that positions the market to surpass $210 billion for the year. This growth is driven by a confluence of factors: LP-led and GP-led transactions, the rise of continuation vehicles (CVs), and the influx of private wealth capital. Yet, as the market expands, so too does its complexity. For institutional investors, the challenge lies in identifying strategic entry points while mitigating risks inherent in a sector still grappling with valuation opacity and structural conflicts.

Strategic Entry Points: GP-Led Secondaries and the Rise of Continuation Vehicles

GP-led secondaries have become a dominant force, accounting for 16% of sponsor exit volume in 2025 and 47% of GP-led issuance in the first half of the year. These strategies allow general partners (GPs) to restructure underperforming or illiquid assets into continuation vehicles (CVs), which now represent 40–50% of GP-led activity. CVs offer a dual benefit: they provide liquidity to limited partners (LPs) while enabling GPs to retain control over high-performing assets, extending their value-creation timelines.

For example, single-asset continuation vehicles (SACVs) have demonstrated superior performance, with a 2025 Morgan Stanley analysis showing they outperformed the MOICs of buyout funds across all quartiles while exhibiting lower loss ratios. This performance, coupled with their concentrated nature, makes SACVs an attractive complement to diversified secondary portfolios. Meanwhile, multi-asset deals-encompassing portfolios of assets or entire funds-are gaining traction, reflecting investor demand for tailored liquidity solutions.

Institutional investors are also capitalizing on the dry powder as of Q3 2025, deploying capital into GP-led strategies that align with their risk-return profiles. Blackstone Strategic Partners, for instance, closed its Strategic Partners IX fund in 2023 with $22.2 billion in commitments, underscoring the appetite for GP-led secondaries. The firm's successor fund, Strategic Partners X, is poised to further capitalize on this trend, with a focus on buyout secondaries and CVs.

Risk Mitigation: Valuation Frameworks and Conflict Management

Despite the market's promise, opacity in valuations and potential conflicts of interest remain significant hurdles. Secondary assets often lack the transparency of primary investments, necessitating robust due diligence frameworks. Institutional investors are increasingly relying on data-driven analytics to assess the fair value of assets, particularly in SACVs where performance metrics are more granular.

Conflict management is another critical area. GP-led transactions inherently involve alignment of interests between GPs and LPs, yet the potential for self-dealing-such as overvaluing assets in CVs-requires rigorous oversight. As noted by industry experts, "careful due diligence around valuations and potential conflicts is essential." Firms like Preqin and Cambridge Associates have developed tools to evaluate GP track records and transaction terms, helping investors navigate these risks.

Portfolio diversification further mitigates exposure to market volatility. Secondary strategies offer immediate access to seasoned assets, reducing the "blind pool" risk associated with primary investments. For instance, secondary funds achieved a 21.4% IRR over a three-year horizon in 2023, outperforming many primary strategies. By diversifying across geographies, sectors, and maturity stages, investors can hedge against sector-specific downturns and liquidity constraints.

The Credit Secondaries Revolution

A parallel shift is occurring in private credit secondaries, where GP-led continuation vehicles are becoming mainstream. In 2024, 38% of credit secondaries transactions were GP-led, a figure projected to exceed 70% in 2025. These structures appeal to LPs seeking liquidity in direct lending portfolios while enabling GPs to access dry powder for new opportunities. The credit secondaries market, which grew from $6 billion in 2023 to an expected $18 billion in 2025, is now a core component of diversified private market portfolios.

Conclusion: A Market of Opportunity and Caution

The Private Secondaries Market's trajectory is clear: it is evolving from a niche strategy to a $200B+ asset class with transformative potential. For institutional investors, the key to unlocking value lies in strategic entry points-such as GP-led CVs and multi-asset deals-paired with disciplined risk mitigation. As the market matures, transparency and innovation will be paramount. Those who master the balance between agility and caution will not only navigate the opacity but also capitalize on the opportunities it conceals.