Institutional Investor Newsletter

1. A banner year: Secondary market transactions reach record levels

Transaction volume in the secondary market is on track for another record year, reaching USD102 billion in just the first six months of 2025 and USD165 billion in transaction value through Q3 2025. This surpasses the prior record of USD160 billion set in 2024.

Market participants anticipate that 2025 transactions will ultimately exceed USD210 billion, with around 55 percent of these deals reflecting limited partner-led sales.

2. Continuation vehicle risks and recent failures

Continuation vehicle (CV) transactions have become a growing source of liquidity, now representing 19 percent of private company exits. However, recent CV failures remind investors that these transactions warrant careful evaluation.

For example, notable CV failures include Clearlake Capital’s Wheel Pros, LLC; Riverstone Energy Limited’s Enviva; and Atlantic Street Capital’s Zips Car Wash, each of which filed for bankruptcy in 2024 or 2025 after being moved into single-asset continuation funds.

In contrast, Abu Dhabi Investment Council, an investor in Energy & Minerals Group (EMG), filed a complaint in the Delaware Court of Chancery on December 3, 2025, seeking a preliminary injunction to stop the sale of EMG fund assets to a CV in a transaction they allege was only approved “through underhanded tactics and misleading disclosures.”

3. Fundraising continues on a consolidated basis

Secondaries funds raised more than USD132 billion in final closes through Q3 2025, exceeding the prior full-year record set in 2023. Growth has been driven by mega-funds, with three managers accounting for nearly half of the total capital raised. The continued growth of evergreen and retail funds has added to the available dry powder. Whether this is sufficient to meet sales demand remains an open question.

4. The buyer market is expanding

Record-setting transaction volumes in 2025 have been supported in part by new market entrants, including evergreen retail funds, specialized funds focusing on market niches, strategic buyers backed by traditional general partners, and increased participation by institutional investors, such as sovereign wealth funds and government pension plans. This increased buy-side participation and competition may drive pricing upward, particularly in the mid-market sector.