Remarks by Commissioner Peirce on Private Secondaries in Capital Markets

Key Takeaways

• Private secondary volume rose 48% to $240B in 2025
• Growth may reduce companies’ incentive to pursue IPOs
• SEC now permits closed‑end funds to sell private‑fund stakes broadly
• Finder regulation remains vague, hindering legitimate capital‑matching activities
• Retail investors still lack direct access to private secondary markets

Pulse Analysis

The private secondary market has emerged as a formidable force in capital formation, posting a 48 percent jump to $240 billion in 2025. This surge reflects investors’ desire for liquidity without the regulatory burdens of a public listing, and it is fueled by continuation vehicles, secondary exchanges, and specialized liquidity providers. As private equity stakes become tradable, firms can recycle capital, extend their private lifespans, and defer the costly IPO process, reshaping the supply‑side dynamics of equity financing.

Regulators are now grappling with how to accommodate this new reality while safeguarding investors. Commissioner Peirce pointed to the SEC’s recent amendment that lets closed‑end funds holding 15 percent or more of private‑fund assets sell shares to non‑accredited investors without minimums, a modest but notable step toward retail inclusion. Yet the commission acknowledges that the current finder‑regulation framework remains fragmented, creating uncertainty for intermediaries who match investors with private opportunities. Clarifying these rules could unlock legitimate capital‑matching activities and reduce the shadow of non‑compliant actors.

Looking ahead, the interplay between private secondaries and IPOs will shape corporate financing strategies. Companies may opt for secondary liquidity routes to satisfy employee and investor cash‑out needs, potentially delaying public offerings and limiting broader market participation. Policymakers face a balancing act: encouraging private‑market efficiency while preserving the public market’s role in price discovery and retail access. Continued dialogue between regulators, industry participants, and investors will be essential to ensure that the growth of private secondaries complements, rather than supplants, a vibrant public equity ecosystem.