The booming private equity secondaries market is expected to reach a new record high this year despite wider macroeconomic uncertainty weighing on other asset classes, new research from Houlihan Lokey shows.
The investment bank’s LP Compass survey of almost 60 of the world’s most active buyers and sellers of secondary stakes revealed 86% expect volume to pass last year’s record of $225m in 2026.
More than 80% of secondary buyers expecting similar or higher volumes this year attribute that view to a continuation of 2025’s slow pace of distributions, the survey said, while over two-thirds expect growth in non-buyout strategies to add volume.
Nearly as many point to retail-oriented investment vehicles driving trading, Houlihan Lokey added, and almost half cite new institutional entrants as a source of momentum.
The report added, “Nearly a third of LP-led secondaries in the second half of 2025 were sold at 90% or more of net asset value, considered seller friendly, with 7% at par or better.
“More than one in four transactions were sold under 80%, a typical level of older, usually harder to sell assets. The picture conveyed is of a balanced market with good opportunities for both buyers and sellers.”
Buyout is leading investor interest (86%) according to the survey, followed by growth (47%) and fund co-investment (26%) – the latter of which Houlihan Lokey said almost always focuses on already identified single assets.
It said, “Combined with investment alongside independent sponsors (16%), an impressive 42% of investors favor identifiable single assets, versus the blind-pool funds that have typified secondary PE investment.
“Sector appetite is broad, with business services, tech, healthcare, industrials and financial services topping the list for the year ahead.”
The report also noted that despite rapid GP-led market expansion, 85% of investors say deal quality has held firm or improved. Alignment remains a core filter, with investors participating only when GP commitments exceed 5% of deal value.
Matt Swain, managing director and global co-head of equity capital solutions at Houlihan Lokey, said, “Apart from temporary growth drivers, namely a slowdown in distributions, responses make it clear that several long-term factors are also powering secondaries.
“These include the spread of secondaries beyond the core private equity strategy of buyouts, into areas like credit and infrastructure, and inflows of new money from both institutional investors and retail investors.
“These are all engines of growth that could drive rising volumes across economic cycles, regardless of the health of distributions.
“One clearly underexploited area of growth are secondaries focused on geographies outside of North America and Europe. Given less developed infrastructure, geographic growth will prove a challenging long-haul, but the opportunity is there.
“One of the more striking aspects of the survey is the high level of investor interest in identifiable single-assets. From negligible less than five years ago, now more than two out of five investors intend to prioritize these assets this year.
“We believe the investors interested in these deals will only continue to grow in coming years. Being able to kick the tires on an investment gives a large amount of comfort to investors, especially in uncertain times, and puts your money to work immediately.
“GP-leds have a long runway as the fastest growing part of the secondary market. They amount to slightly less than half of annual volume today, up from a tiny fraction just ten years with the vast majority of Compass respondents giving these deals their stamp of approval.
“They’re basically a high return complement to the traditional LP-stakes market.”
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