What is secondary private equity?
In the primary market, an investor commits to a fund that has not yet made its investments: a "blind pool" whose portfolio is built over several years. The secondary market works the other way round. It lets investors buy and sell interests in funds that are already running, or stakes in companies directly, with a portfolio that is partly or fully built. The buyer takes over the position of an exiting investor and can see the companies held. The price is negotiated against net asset value (NAV), often at a discount, and the deal is LP-led or GP-led depending on who initiates it.
This market has changed scale and now has a full place in private markets allocations. We analyse its size and trends in our guide dedicated to the secondary private equity market.
Key takeaways
- Secondary private equity means buying interests in existing funds or portfolios of holdings.
- The investor acquires a portfolio that is already built, often at a discount to net asset value.
- The advantages: a softer J-curve, visibility on the assets, diversification across vintages.
LP-led and GP-led: the two types of secondary transactions
The secondary market rests on two types of transactions. Before looking at fund types, it helps to understand who starts the deal and why.
LP-led transactions
In an LP-led transaction, an investor (Limited Partner) sells its interests in a fund before maturity: a need for liquidity, an allocation rebalancing or a regulatory constraint. The secondary buyer takes over its commitments and holdings. This is the historical form of the market, centred on the liquidity offered to the seller. It also allows active portfolio management and capital reallocation.
GP-led transactions
In a GP-led transaction, the management company (General Partner) organises the deal, most often through a continuation fund. It transfers one or more assets it wants to hold for longer into a new vehicle, which gives existing investors an exit and new investors an entry point. This fast-growing segment gives access to quality assets already identified and managed by the GP.
| Criterion | LP-led | GP-led |
|---|---|---|
| Initiated by | The selling investor (LP) | The management company (GP) |
| Typical vehicle | Purchase of existing fund interests | Continuation fund |
| Rationale | Liquidity for the seller | Hold or extend assets |
The continuation fund
A continuation fund transfers assets from a primary fund into a new vehicle. The manager can then hold them beyond the fund's original life, often set at ten years, to give them time to reach their potential. Existing investors choose to sell or to roll over, and new investors join the capital. An independent valuation can set the value of the transferred assets.
The manager keeps running companies it knows well, which preserves continuity of management. These vehicles are particularly useful when listed markets are uncertain and exits through an IPO become less attractive.
How a secondary transaction works: the discount
The price of a secondary transaction is set against the net asset value (NAV) of the interests. Buyers frequently acquire them at a discount: they pay less than the estimated value of the portfolio. The discount rewards the liquidity given to the seller and the risk taken on by the buyer. It is one of the main performance levers of the strategy. Its size varies widely with market cycles, the type of transaction and asset quality. According to Jefferies, LP portfolios traded at an average 87% of NAV in the first half of 2026 (91% for buyout), an average discount of 13%. GP-led deals trade closer to par: at Evercore, most single-asset continuation fund volume closed at NAV.
Unlike in the primary market, the secondary investor knows what it is buying: the portfolio companies are known, with a track record. Most of the "blind pool" uncertainty disappears. The funds acquired are already invested, which explains the softer J-curve of the strategy.
Through a platform whose management company is authorised by the AMF.
Why the secondary market has grown
Secondary funds meet a need for liquidity in an asset class built on long-term commitments. They let an investor leave a fund before the end of its holding period, to rebalance a portfolio or raise cash. According to Preqin, the number of private equity funds and the variety of strategies rose sharply in the 1990s, which multiplied the need to manage commitments more dynamically.
The denominator effect
When markets fall, the value of equities and other liquid assets drops fast, while illiquid assets look stable because they are valued periodically. An institutional investor's portfolio then shows a share of illiquid assets above its target allocation. LP-led transactions give these investors, pension funds and foundations in particular, a way to rebalance their exposure without waiting for funds to mature.
Managers benefit too. Moving a high-quality company into a continuation vehicle has become an alternative to a sale or an IPO. As for economic cycles (the dot-com crash, the global financial crisis, the pandemic), they opened opportunities to buy discounted assets ahead of the recovery.
The benefits of secondary private equity
A softer J-curve
In classic private equity, returns are first negative, while capital is called and holdings start to produce results: this is the J-curve. Secondaries buy funds that are already mature, with most of their capital deployed. Distributions arrive earlier, and the entry discount cushions the initial dip further. We detail this mechanism in our guide to the J-curve.
Immediate diversification and faster deployment
A single secondary investment gives access to several funds, managers, vintages, strategies and geographies. This diversification reduces the dispersion of performance, which is considerable in private markets. With the vehicle we offer, exposure reaches for example 1,500 to 3,000 underlying companies. The assets bought are already mature: the value creation lever remains open, at prices that sometimes include a discount.
Capital comes back faster than in primary funds: 6 to 7 years on average for a secondary portfolio, against 10 to 11 years for a primary programme, according to BlackRock as cited by Partners Capital. Recycling of distributions keeps funds 100% invested while reducing the investor's commitment. Management fees and carried interest are also competitive compared with primary private equity.
| Criterion | Primary | Secondary |
|---|---|---|
| Portfolio | To be built (blind pool) | Already built, visible |
| J-curve | Pronounced | Softer |
| Vintage diversification | One | Several at once |
| Distributions | Late | Faster |
| Entry price | At NAV | Often at a discount |
Returns and risks of secondary private equity
A tighter return profile
Secondaries do not beat classic private equity at the median, but they narrow the gap between the best and worst funds. According to PitchBook, across 2005 to 2020 vintages, the median net IRR of secondary funds is 12.6%, against 13.5% for private equity. The bottom decile comes out at 4.8% against 1.4%, and 16.4 points separate the top and bottom deciles. PitchBook notes that some funds report their own results, which can bias the data towards the best performers. For the performance context of the asset class, see our guide to private equity returns.
The secondary market reached $240 billion in volume in 2025 according to Jefferies, a record ($226 billion for Evercore, whose scope differs). In the first half of 2026, Jefferies counts $118 billion, up 15% year on year, Evercore $121 billion and Lazard about $124 billion. GP-led deals account for 53% of volume according to Jefferies, or $62 billion against $56 billion for LP-led: the first time since 2021 that GP-led is the majority. For 2026, the three intermediaries expect another record, between about $250 billion and $275 billion. Despite this size, secondary trading represents about 2% of private markets, according to Apollo.
Key figures
- Global volume 2025: $240bn (Jefferies; $226bn for Evercore)
- First-half 2026 volume: $118bn (Jefferies; $121bn for Evercore, about $124bn for Lazard)
- GP-led share in the first half of 2026: 53% (Jefferies)
- Average price of LP portfolios: 87% of net asset value (Jefferies, first half of 2026; 91% for buyout)
- Median net IRR: 12.6% for secondaries, 13.5% for private equity (PitchBook, 2005 to 2020 vintages)
- Return of capital: 6 to 7 years for secondaries, 10 to 11 years for primary (BlackRock, cited by Partners Capital)
Volumes are intermediaries' estimates and their scopes differ. IRRs are net of fees, carried interest and expenses (PitchBook data as of Q4 2025). Prices as a percentage of net asset value relate to LP portfolios; single-asset continuation funds trade closer to par.
(Source: Jefferies, Global Secondary Market Review, July 2026, and 2025 review; Evercore, H1 2026 Secondary Market Review; Lazard, Interim 2026 Secondary Market Report; Apollo, October 2026, citing PitchBook; Partners Capital, Insights 2026 Secondaries, citing BlackRock, The Case for Secondaries, 2024. Summary and editorial analysis by Private Corner.)
The risks
The risks remain those of private markets: risk of capital loss, illiquidity risk, and a valuation of underlying assets that stays an estimate. Three points are specific to secondaries. The buyer may overpay if the discount is too small or if the underlying assets do not perform as expected. It depends on the manager's expertise and access to information to judge asset quality. Finally, the complexity of structures and transactions makes accurate valuation hard for a less experienced investor.
The quality of the secondary manager therefore weighs heavily: its ability to source transactions, to value portfolios fairly and to deliver across several vintages. This is the first criterion to examine when choosing an access point.
How to invest in secondary private equity
The best secondary strategies go through institutional funds, whose tickets are out of reach for most private investors investing directly. Private Corner, a French digital management company authorised by the AMF (no. GP-20000038), structures feeder funds that pool these tickets. They are available from €100,000 (and sometimes from €20,000 through certain vehicles) to private wealth professionals and their clients.
Private Corner has notably opened access to leading secondary strategies, such as the Committed Advisors Secondary strategy offered through its feeder, selected after in-depth due diligence. To understand what sets platforms apart, see how to select a private equity investment platform.
Conclusion: a selective entry point into private equity
Secondary private equity has gone from a niche market to a structural component of private markets allocations. By buying interests in funds that are already built, often at a discount, the investor gets a softer J-curve, visibility on the assets and immediate diversification across vintages. Each transaction, LP-led or GP-led, follows its own logic. The risk of capital loss and illiquidity remain: everything depends on a manager able to source and value the right transactions, which for a private investor means a management company authorised by the AMF.
Let us discuss your needs and the strategies available.
FAQ: secondary private equity
What is the discount in secondary private equity?
It is the gap between the price paid for fund interests and their net asset value. The secondary buyer often acquires interests below their estimated value, in return for the liquidity it gives the seller and the risk it takes on.
What is the difference between LP-led and GP-led transactions?
In an LP-led deal, an investor sells its interests before the fund reaches maturity. In a GP-led deal, the management company organises the transaction, usually through a continuation fund that keeps certain assets for longer.
Why do secondaries soften the J-curve?
Because they buy funds that are already invested and mature: most of the capital is deployed and distributions arrive earlier, which shortens the initial negative-return phase typical of primary private equity.
Do secondaries return less than primary funds?
Slightly less at the median. According to PitchBook, cited by Apollo, the median net IRR of secondary funds is 12.6% against 13.5% for private equity across 2005 to 2020 vintages. Secondaries stand out for lower dispersion: 16.4 points separate the top and bottom deciles. They remain exposed to the risk of capital loss. Past performance is not a reliable indicator of future performance.
Where can you buy interests in private equity funds on the secondary market?
Through selected secondary funds, via an advisor. Private Corner gives access to institutional secondary strategies from €100,000 for professional or informed investors.
The figures cited are historical or forecast and are not guaranteed results. Disclaimer: this document is for information purposes only, intended for wealth management professionals, and issued by Private Corner, a management company authorised by the AMF (GP-20000038). It does not constitute investment advice or a recommendation to subscribe. Investments in private markets involve risks including loss of capital, illiquidity and valuation risk. Past performance and forecasts are not a reliable indicator of future performance.
