Last year, the global private equity secondary market reached a record $226bn in transaction volumes – a 41% percent increase on an already record-breaking 2024¹. Secondaries are no longer confined to the periphery of private markets, and as investors brace for another potential record year, selectivity will be essential, with Europe emerging as a bright spot.
Another record year?
The slowdown in initial public offerings (IPOs), which provide an exit route from private capital investments for investors (LPs) and fund managers (GPs), is often cited as one of the key drivers behind the growth of the secondary market.
But we believe there are a multitude of reasons the market matured. GP-led transactions, whereby sponsors offer existing investors liquidity while retaining exposure to assets, have evolved into a permanent feature of the market, for example.
Previously viewed as emergency liquidity solutions, ‘GP-leds’ reached $106bn in 2025, a year-on-year increase of 49%². They are now increasingly used by sponsors to retain high-performing assets, restructure incentives and optimise capital structures, ensuring a steady supply of deals.
So, even with IPO activity expected to increase in 2026, the market’s momentum appears to be here to stay.
Increasing volumes but no overheating
With the pace of activity seen over the past few years set to continue, some might question whether the market is overheating. But even with a significant amount of dry powder available for secondaries investments³, deal flow remains very healthy, illustrating the sector is still structurally undercapitalised.
And our assessment of available pricing data does not suggest overheating, either. In many segments, pricing levels remain broadly in line with historical averages, particularly in LP-led transactions. Underwriting standards and due diligence processes also remain disciplined, with a clear bifurcation between high-quality and lower-quality assets.
The case for Europe
With an abundance of deals to choose from, investors must adopt a highly selective approach. We currently see attractive opportunities in European secondaries. The European market is characterised by lower entry valuations, structural resilience, robust corporate governance frameworks, and a growing pipeline of high-quality assets.
An overwhelming focus on technology has proven to be both a strength and a source of vulnerability for the US. For resilience and diversification, we believe Europe provides a compelling alternative given its focus on productive sectors of the economy, including manufacturing, healthcare, infrastructure, and clean energy.
With public finances stretched even in the most resilient European countries, private capital will play a major role in supporting these sectors as governments strive for greater autonomy, reindustrialisation and decarbonisation.
However, complacency would be misplaced. While Europe offers a broad array of opportunities, their quality and ability to deliver returns will vary. Given the sheer size and complexity of this market, expertise and nuanced understanding are key: deal sourcing needs to be supported by robust data, strong structuring expertise and regulatory knowhow.
Maturity without saturation
Despite a sequence of record years, the secondary market is set to continue its structural expansion, having evolved into a sophisticated and intermediated ecosystem that enables sellers to actively and dynamically manage their exposure to private assets. From a buyer’s perspective, we see current market conditions as particularly attractive. Despite the strong growth of the secondary market, supply continues to outweigh demand, sustaining meaningful discounts – notably across European transactions.
Far from eroding returns, the maturation of the secondary market is reinforcing its relevance, efficiency, and long-term attractiveness for both sides of the trade.
¹ Evercore 2025 Secondary Market Report
² Evercore 2025 Secondary Market Report
³ Evercore 2025 Secondary Market Report
