The Other Exit

The global secondary market for private assets has entered a new era. After crossing $160 billion in 2024 and $226 billion in 2025, industry projections point to annual transaction volumes approaching $300 billion by 2027. That growth is driven by two distinct but converging forces: a surge in GP-led transactions — primarily continuation vehicles — through which general partners extend their hold on high-conviction assets while offering existing limited partners an early exit; and a rising tide of LP portfolio sales, as pension funds, endowments, sovereign wealth funds, and increasingly, wealth management platforms rebalance overextended private markets allocations.

Together, these two streams have transformed the secondary market from a distress-driven backwater into a sophisticated, strategy-grade segment of the private markets’ ecosystem. Secondary funds now market explicitly to defined contribution plans, family offices, and high-net-worth channels. Evergreen and interval-fund structures are being used to democratize secondary access. And GP-led processes have become so mainstream that continuation vehicles now represent approximately one in five sponsor-backed private equity exits.

For asset managers, wealth advisors, private bankers, and family offices operating across the United States, the U.S. offshore channel, and Latin America, the implications are immediate. Clients already holding private equity — whether through direct fund commitments, feeder structures, or notes — are likely to encounter secondaries on both sides of the trade within the next investment cycle. Understanding the mechanics, the pricing dynamics, and the strategic uses of this market is no longer optional expertise. It is table stakes.

This paper examines the structural drivers behind the secondary market’s growth, explains how GP-led and LP-led transactions work in practice, analyzes the wealth channel’s evolving role as both buyer and seller, and draws out the specific implications for advisors and asset managers serving the U.S. offshore market and Latin America.

From Relief Valve to Strategic Tool: The Secondary Market’s Growth

The secondary market for private assets has always served a fundamental economic function: it allows investors who need liquidity to sell interests in funds or assets that were not designed to be liquid. For most of its history, that function was reactive. Sellers were often institutions under pressure — endowments facing spending requirements, pension funds rebalancing after a market dislocation, or investors who had misjudged their capital needs. Buyers were opportunistic, demanding steep discounts to par as compensation for the complexity of acquiring stakes in closed-end funds.

That characterization is now outdated. The secondary market of 2026 is larger, more diverse, more buyer-friendly, and far more strategically intentional than its predecessors. Several forces explain the transformation.

Volume Growth and Market Depth

In 2015, total secondary market volume was estimated at approximately $40 billion. By 2024, it had reached $160 billion. In 2025 alone, volume grew a further 48% to $226 billion, according to data compiled by Jefferies. The pipeline entering 2026 is deep: Jefferies estimates first-half 2026 volume could exceed $100 billion on backlog alone. The market has developed sufficient depth that large transactions — in excess of $5 billion — can clear without meaningful pricing distortion, a degree of liquidity that would have been inconceivable a decade ago.

The Overhang Problem

One structural driver of this growth is the private equity industry’s own success. Years of strong fundraising, combined with a protracted slowdown in IPOs and strategic M&A activity after the 2022 rate shock, produced a large overhang of unrealized value locked inside aging funds. General partners whose funds were approaching or past their planned investment horizon faced a dilemma: sell portfolio companies into an unfavorable market and crystalize subpar returns, or seek alternative mechanisms to manage the fund’s lifecycle. GP-led secondaries — and particularly continuation vehicles — emerged as the preferred solution, allowing GPs to extend their hold on high-quality assets while providing some LPs with an earlier liquidity option.

The LP side faces its own overhang. The denominator effect following the 2022 public markets correction left many institutional investors technically over-allocated to private markets relative to their policy targets. Portfolio sales — in which an LP sells a portfolio of fund interests in a single transaction — became an efficient tool for rapid rebalancing, and the bid side of the market developed to absorb increasingly large blocks of assets.

“The secondary market has graduated from a crisis mechanism to a portfolio management tool. The sell-side motivation is now as often strategic as it is distressed — and the buy-side has priced accordingly.”

Discounts to net asset value, which routinely exceeded 30% during market disruptions, have compressed significantly in calmer conditions. Broad portfolios of buyout fund interests often trade in the 85 to 95 cents on the dollar range when the underlying assets are sound. GP-led processes involving high-quality single or dual-asset continuation vehicles frequently clear at or above NAV. This pricing normalization is itself a signal of market maturation: sellers are less desperate, buyers are more numerous, and price discovery has become more efficient.

GP-Led Secondaries: The Continuation Vehicle in Practice

Of the two main streams feeding secondary market growth, GP-led transactions have attracted the most attention — and the most controversy. Understanding why requires a clear view of the mechanics.

How Continuation Vehicles Work

A continuation vehicle (CV) is a transaction in which a general partner moves one or more portfolio companies from an existing fund into a new purpose-built special purpose vehicle, effectively extending the GP’s management of those assets beyond the original fund’s term. Existing limited partners in the original fund are offered a choice: they can sell their interest in the relevant assets to the secondary buyers financing the new vehicle, realizing liquidity at a negotiated price; or they can roll their position into the CV, continuing their exposure to the portfolio company alongside the new capital.

From the GP’s perspective, a continuation vehicle solves a genuine problem. Private equity portfolio companies require active ownership and often need additional capital to achieve their full potential. Forced sales into a weak M&A market destroy value. A CV allows the GP to maintain control, inject new capital if needed, and hold until conditions are more favorable — without violating the original fund’s mandate or term.

From the LP’s perspective, the CV presents a fork in the road. Rolling into the vehicle means accepting continued illiquidity alongside a new investor base and a new fee structure. Taking the cash means accepting the secondary buyer’s price, which is negotiated under conditions where the GP — who controls the process — has asymmetric information about the portfolio company’s outlook. This conflict of interest is real and has drawn regulatory scrutiny, particularly from the SEC, which has pushed for greater disclosure and fairness opinion requirements in GP-led processes.

Scale and Normalization

What was once considered a structural novelty has become structural standard. Closed continuation vehicle volume grew 93% year-over-year in Europe and 34% in North America in 2025, according to data compiled by Dechert. GP-led transactions as a whole now represent approximately 14% of all sponsor-backed exit volume — a figure that would have seemed extraordinary five years ago. Major asset managers including Golub Capital, Apollo, and Blackstone have built dedicated GP-led secondary capabilities, signaling a permanent institutionalization of the practice.

The market has also diversified beyond pure buyout. GP-led structures are now being applied in private credit — where managers of credit funds seek to retain high-performing loan portfolios beyond a fund’s maturity — and in infrastructure, where the long-dated nature of underlying assets makes continuation especially natural.

The LP Portfolio Sale Renaissance

While GP-led transactions captured the headlines, LP portfolio sales quietly became the dominant volume driver in the secondary market. These transactions — in which a limited partner sells a diversified portfolio of fund stakes to one or more secondary buyers — are the original secondary market mechanism, and they are experiencing a structural renaissance.

Who Is Selling and Why

The profile of LP sellers has broadened considerably. Public pension funds in the United States and Europe remain active sellers, managing over-allocation and funding current spending obligations. Sovereign wealth funds with policy-driven rebalancing requirements are increasingly using portfolio sales as a tool. Insurance companies seeking to reduce capital intensity are selling private markets stakes. And, perhaps most significantly for the wealth channel, a growing cohort of fund-of-funds, multi-family offices, and wealth management platforms are using the secondary market to manage the vintage-year concentration and sector overlap that accumulate in maturing private equity programs.

The motivations are not always distress-driven. Portfolio optimization — the deliberate pruning of tail-end fund relationships to concentrate capital with higher-conviction managers — is increasingly cited as a selling rationale. As private markets programs mature, the organizational cost of maintaining dozens of fund relationships with modest remaining value is not trivial. Portfolio sales allow sellers to exit that tail cleanly, concentrate capital, and re-deploy into newer vintages or different strategies.

Pricing and Process Dynamics

Portfolio sales are typically structured as competitive processes managed by placement agents, with secondary buyers submitting bids for the entire portfolio or for tranches. Pricing depends heavily on vintage year distribution, manager quality, geographic concentration, and the buyer’s view of remaining duration and return potential. Portfolios weighted toward recent vintages with recognized managers in favorable sectors — technology, healthcare, infrastructure — will clear at meaningfully tighter discounts than portfolios dominated by older funds with long remaining life and limited exit visibility.

A critical dynamic for sellers to understand is the distinction between volume-weighted pricing and cherry-picking. Most secondary buyers will bid on the full portfolio, but their willingness to pay a full-portfolio price depends on the overall quality of the lot. Sellers who carve out the best assets for separate sale and attempt to sell the remainder as a portfolio often find that the residual trades at a steep discount, or does not trade at all. Portfolio integrity matters.

The Wealth Channel as Buyer: A New Access Point for Alternatives

Historically, the secondary market was the exclusive domain of institutional investors — large secondary funds with multibillion-dollar mandates, pension funds rolling positions, and sovereign wealth funds with the scale and sophistication to navigate complex fund transfers. That exclusivity is dissolving.

Democratization Vehicles

The same structural forces driving the broader democratization of private markets — evergreen fund structures, interval funds, semi-liquid vehicles, and structured notes — are being applied to secondaries. Several major secondary fund managers now offer vehicles specifically designed for the wealth channel: lower minimum investments, periodic liquidity windows, simplified subscription processes, and feeder structures that allow individual investors to access secondary market returns without the operational complexity of direct fund transfers.

The appeal of secondaries as an entry point for wealth channel investors is intuitive. Secondary investments offer what primary fund commitments do not: a shorter blind-pool period, a visible portfolio of assets, reduced J-curve effect (since the assets are already invested and in many cases approaching exit), and the potential for a built-in discount to NAV. For advisors managing client expectations around illiquidity and the timing of returns, secondaries offer a more legible investment proposition than a new primary fund commitment.

According to BlackRock’s 2026 Private Markets Outlook, the wealth-focused evergreen universe — which includes many secondary-oriented vehicles — stood at approximately $427 billion at year-end 2024 and is projected to exceed $1.1 trillion by 2029, growing at a compound rate above 20%. Secondary-focused strategies represent a growing share of that universe.

“For advisors managing client expectations around illiquidity, secondaries offer a more legible investment proposition than a new primary fund commitment. The portfolio is visible, the assets are seasoned, and the J-curve is truncated.”

The Wealth Channel as Seller

The wealth channel is not only emerging as a buyer of secondaries — it is also becoming a more frequent seller. As private markets access expanded aggressively through the wealth channel over the past decade, many high-net-worth clients and family offices now hold meaningful allocations to private equity, private credit, and real assets through semi-liquid vehicles, feeder funds, and structured products. Some of those allocations were made at peak valuations in 2021 and 2022. Others reflect vintage concentration in specific sectors or geographies.

Advisors managing these portfolios increasingly need to understand how to use the secondary market to manage overallocation, exit aging positions, or rebalance toward more current opportunities. This requires a different set of competencies than traditional private markets advisory: an understanding of secondary pricing mechanics, the ability to identify and engage secondary buyers or placement agents, and the skill to explain to clients why selling at a discount to NAV can be a rational portfolio management decision — not a failure.

Latin America and the U.S. Offshore Channel: Liquidity Meets Opportunity

The secondary market’s growth is primarily a developed-market phenomenon in terms of transaction volume, but its implications extend directly to the U.S. offshore channel and to Latin America’s maturing private markets ecosystem. Several dynamics deserve specific attention.

The Offshore Advisor and the Liquidity Problem

U.S. offshore advisors — the international desks of broker-dealers and private banks based in Miami, New York, Houston, and other financial centers — have spent the last decade expanding their clients’ exposure to private markets. That expansion was largely supply-driven: asset managers eager to tap the wealth channel brought semi-liquid vehicles, feeder funds, and structured notes to offshore platforms with increasing frequency, and advisors responded to client demand for yield and diversification that public markets could not reliably provide.

The result is that a meaningful portion of client portfolios in the U.S. offshore channel now carries private markets exposure that was designed — by the issuer and, in many cases, by the advisor — as long-duration capital. For some clients, that duration fits their financial profile. For others, circumstances have changed: liquidity needs have emerged, portfolio concentration has grown, or the original investment thesis has evolved. The secondary market is the mechanism for addressing those situations, and offshore advisors who do not understand it are poorly equipped to serve clients who increasingly need it.

The U.S. offshore market serves a client base — primarily high-net-worth Latin Americans who hold assets in the United States for diversification and safety reasons — whose relationship with illiquidity is complicated by geopolitical and currency risk at home. When domestic conditions deteriorate, as they periodically do across the region, the demand for portfolio liquidity is not hypothetical. It is urgent. An advisor who can access the secondary market on behalf of a client in that situation provides a service that goes beyond investment performance.

Latin America’s Private Markets Ecosystem and the Secondary Opportunity

Latin America’s domestic private markets are in a distinct phase of development. Private equity and private credit activity in Brazil, Mexico, Colombia, Chile, and Peru has grown significantly over the past decade, driven by the emergence of local general partners with institutional-quality track records, the professionalization of the agente autônomo and independent advisory channel in Brazil, and regulatory frameworks — most recently Brazil’s CVM reforms and Colombia’s expanded fund rules — that have broadened the pool of eligible investors.

According to J.P. Morgan Private Bank’s 2026 Latin America outlook, approximately 70% of Latin American high-net-worth individuals are now allocating capital to alternatives. A 2026 survey of regional investment professionals found that 60% plan to increase positions in private debt, 48% in private equity, and 41% in infrastructure. The domestic capital base supporting private markets — including pension funds (AFPs and FUNDOs), insurance companies, and family offices — is growing in scale and sophistication.

Against this backdrop, a Latin American secondary market is beginning to emerge, though it remains nascent by global standards. Most secondary transactions involving Latin American private assets today are cross-border in structure — a Latin American LP selling a position in an offshore-domiciled fund to a U.S. or European secondary buyer, for example. But as the volume of locally domiciled funds grows and as Latin American institutional investors mature their portfolio management practices, a more developed regional secondary market is a foreseeable development, and the advisors and managers who build expertise now will be positioned to lead it.

Capital Flows and the Portfolio Rebalancing Imperative

One specific dynamic affecting both the offshore channel and Latin American markets deserves attention: the impact of political and economic uncertainty on private markets portfolios. Capital flows to the U.S. offshore market are substantially driven by a desire to diversify away from domestic political and currency risk, a pattern well-documented by Cerulli Associates and others. When that uncertainty spikes — as it has periodically in Argentina, Brazil, Mexico, and other countries — client demand for liquid, repatriable assets increases sharply.

Clients who have allocated to private markets through domestic structures face a structural mismatch in those moments: their safest offshore assets may be the most liquid, while their domestic private markets exposure is precisely the least liquid. Understanding how to navigate that mismatch — potentially through secondary sales of domestic positions or through structured liquidity solutions at the offshore level — is an increasingly important advisory competency in the Latin American and offshore wealth management context.

Strategic Implications for Advisors and Asset Managers

The secondary market’s maturation creates both opportunities and obligations for participants across the private markets distribution chain. Several strategic implications are worth drawing out explicitly.

For Wealth Advisors and Private Bankers

Advisors need to develop working literacy in secondary market mechanics — not the deep specialization of a dedicated secondary fund manager, but enough understanding to identify when a client’s situation warrants a secondary-side conversation, and to engage intelligently with secondary specialists who can execute. That literacy should include: how continuation vehicles work and what the rollover-versus-exit decision involves; how to assess the pricing environment for LP portfolio sales; how semi-liquid vehicles handle secondary market exits relative to direct redemptions; and when a secondary sale is a better outcome for a client than waiting for a primary fund’s natural liquidation.

For offshore advisors managing Latin American client portfolios, the secondary market conversation should be part of the standard toolkit for private markets portfolio construction — not a crisis response, but a planning tool. Building secondary access into the portfolio management framework from the initial allocation stage is meaningfully different from learning how to sell a position in distress.

For Asset Managers and Product Issuers

Asset managers distributing private markets products through the wealth channel — whether in the form of evergreen funds, feeder structures, or structured notes — should be explicit with advisors and clients about the secondary market liquidity available for their products. Transparency about secondary pricing history, the existence of organized secondary markets for specific vehicle types, and the operational process for secondary transactions significantly reduces the information asymmetry that currently characterizes the wealth channel’s relationship with private markets illiquidity.

Managers building distribution in the U.S. offshore and Latin American markets should also consider whether secondary access is a product feature worth developing proactively. Offshore clients who understand that a secondary exit path exists — even if it involves a discount — are meaningfully more comfortable making long-duration commitments than clients for whom illiquidity means a complete absence of exit options. Secondary liquidity, properly framed, is a competitive advantage in distribution.

For Latin American General Partners

Latin American private equity and private credit managers looking to attract international institutional capital should understand that the presence or absence of secondary market infrastructure for their funds is a growing diligence factor for sophisticated allocators. The ability to offer LPs a credible secondary market exit — either through organized processes managed by the GP, or through established relationships with regional secondary specialists — improves the investability of Latin American private market funds for global investors who value portfolio flexibility.

The most forward-thinking Latin American GPs are already thinking about continuation vehicles and LP liquidity solutions as tools for fund management rather than as contingency options. That posture is consistent with global best practice and positions managers favorably as the regional secondary market develops.

Conclusão

The secondary market for private assets is no longer a specialized niche — it is a mainstream mechanism for managing private markets exposure across the full capital lifecycle. The $226 billion in 2025 transaction volume, the normalization of continuation vehicles as an exit path, and the emergence of the wealth channel as both buyer and seller of private assets mark a structural shift that advisors, asset managers, and family offices cannot afford to approach as observers.

For participants operating across the United States, the U.S. offshore channel, and Latin America, the secondary market’s growth is directly relevant. Clients in the offshore channel hold private markets exposure that was built during a period of aggressive product distribution and will need managing over the coming years. Latin American family offices and institutional investors are increasingly sophisticated allocators facing real liquidity management challenges. And the domestic private markets ecosystem in the region is developing in ways that will eventually generate its own secondary market activity.

The advisors and managers who build genuine competency in secondary markets — in how they work, how they price, and how to use them as a portfolio management tool — will be better equipped to serve the needs of clients across all three ecosystems. The secondary turn in private markets is not a trend. It is a structural feature of how sophisticated investors manage private markets portfolios in the current environment. Understanding it is foundational.

Sources and References

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