The private capital secondary market is on course for a record year, with transaction volumes potentially reaching $250bn after hitting an unprecedented $121bn during the first half of 2026, according to a report by Bloomberg citing comments from Nigel Dawn, global head of private capital advisory at Evercore.
Dawn said the market’s rapid expansion reflects a fundamental change in how large limited partners (LPs) are using secondaries to generate liquidity as private equity portfolios continue to deliver fewer distributions than expected.
Dawn said the secondary market has evolved from a specialist exit route into an increasingly important component of private markets infrastructure.
General partner-led transactions have emerged as the largest segment, overtaking traditional LP-led sales. Single-asset continuation vehicles have been particularly prominent, allowing GPs to retain high-quality assets that they believe still have significant growth potential while providing existing investors with an opportunity to realise some or all of their holdings.
Despite its rapid expansion, the secondary market remains relatively small compared with the overall private capital industry. Dawn estimates that secondary transactions currently account for only around 2% of global private assets under management, suggesting considerable scope for further growth.
Evercore expects approximately $150bn of additional secondary-market capital to be raised during the second half of the year. According to Dawn, there is sufficient underlying demand for transactions, meaning the key limitation on further expansion is increasingly the amount of capital available to finance them rather than a shortage of assets coming to market.
The market’s evolution is also being reflected in the treatment of software assets, where continuation transactions have fallen sharply amid concerns about the impact of artificial intelligence on business models and valuations.
Dawn said activity in software-related continuation deals is beginning to recover, but investors have become considerably more selective. Vertical software businesses with defensible positions and applications where AI can enhance rather than undermine the underlying proposition are attracting greater interest.
Horizontal software companies, meanwhile, are facing more scrutiny because AI could put pressure on pricing, customer retention and established business models.
The changing approach reflects a more detailed assessment by secondary investors of which software businesses can maintain their competitive advantages as AI adoption accelerates.
Pricing across the broader buyout secondary market has also moved closer to equilibrium. Dawn said around 90% of the latest valuations are now being used as effective transaction prices, indicating that the gap between buyer expectations and seller pricing has largely narrowed.
The combination of increased demand for liquidity from LPs, greater use of continuation vehicles by GPs and growing institutional participation is helping to establish secondaries as a mainstream component of private equity portfolio management.
With $121bn of transactions already completed in the first six months of 2026, the market is now on pace for a year that could fundamentally reinforce the role of secondaries in the private capital ecosystem.
