Secondaries in 2026: Record $226B in 2025 Sets Stage for Continued Growth

Secondaries Market Posts $226B Record in 2025 — 2026 Outlook Remains Bullish According to Torys LLP's Q1 2026 market outlook, the private fund secondaries market achieved a record $226 billion in total transaction volume in 2025 — a 41% increase over the prior record of $160 billion in 2024. The market was split nearly evenly between LP-led transactions ($120 billion) and GP-led processes, with continuation funds now representing approximately one-in-five sponsor-backed private equity exits. Key Structural Drivers for 2026 Growing market sophistication: Mid-market fund sponsors are increasingly exploring non-traditional liquidity solutions, and pension investors are building genuine muscle memory in secondary transactions on both the buy and sell side. DPI focus intensifies: With approximately 40% of buyout fund NAV aged over seven years and a $100 billion estimated exit backlog, LPs remain under pressure to generate distributed capital — a direct catalyst for secondary deal flow. Retail capital rising: Registered 40 Act funds in the US are introducing incremental pricing competition in LP-led transactions, supporting pricing for sellers of quality assets. Dry powder constraints: Secondary fund dry powder at approximately $215 billion has fallen below total 2025 deal volume, suggesting meaningful headroom for the strategy to grow from a capitalization standpoint. Fundraising momentum: Secondaries-focused funds represented nearly 20% of all private equity fundraising by total capital raised in 2025. "Our expectation is that 2026 will be a year of growth in the secondaries space, where an ongoing backlog of distribution activity will continue to compel sponsors and investors seeking liquidity toward secondaries markets." — Torys LLP, Q1 2026 Outlook Why This Matters for Private Markets The sustained structural growth of the secondaries market reflects a fundamental change in how institutional investors manage private equity portfolios. Secondary transactions are no longer emergency exits — they are proactive portfolio management tools. With dry powder running below deal volume for the first time and retail capital entering the buyer pool, both supply and demand dynamics favor institutional platforms that can facilitate complex, multi-asset secondary transactions at scale.