Outlook Bright for Global PE Secondaries, Volume Expected to Reach New Record This Year: Houlihan Lokey

Why It Matters

The outlook signals sustained liquidity demand and capital allocation to private‑equity assets despite broader macro uncertainty, reshaping risk‑return dynamics for investors and sponsors alike.

Key Takeaways

• 86% forecast record secondary volume surpassing $225M
• Retail vehicles and new institutions boost trading activity
• Single‑asset deals now favored by 42% of investors
• GP‑led secondaries represent half of market volume
• Deal quality stable or improving per 85% respondents

Pulse Analysis

The private‑equity secondary market is entering a rare growth phase, with Houlihan Lokey’s latest LP Compass survey indicating a near‑record surge in transaction volume. While many asset classes wrestle with tighter credit conditions and slower economic growth, secondary stakes are buoyed by a pronounced slowdown in fund distributions, freeing capital for resale. Survey respondents—spanning the world’s most active buyers and sellers—project that 2026 will surpass the $225 million benchmark set last year, underscoring a resilient demand pipeline that transcends traditional buyout focus.

Beyond the core buyout arena, investors are diversifying into growth, credit, and infrastructure secondaries, expanding the market’s breadth. Retail‑oriented investment vehicles and fresh institutional entrants now account for a sizable share of trading, injecting fresh liquidity and broadening the investor base. Notably, 42% of participants prioritize identifiable single‑asset deals, a sharp rise from a few years ago, reflecting a desire for transparency and immediate deployment. Meanwhile, GP‑led transactions have matured into a substantial segment, now comprising roughly half of annual secondary volume, offering sponsors a high‑return complement to conventional LP‑stakes.

For market participants, the implications are twofold. Sellers benefit from a balanced pricing environment—about a third of LP‑led deals achieve 90% + of net asset value—while buyers gain access to quality assets with firm GP commitments exceeding 5% of deal value. Geographic expansion beyond North America and Europe presents untapped opportunities, albeit with infrastructure challenges. As deal quality remains stable or improves according to 85% of respondents, the secondary market is poised to act as a strategic liquidity conduit, reinforcing private‑equity’s role in diversified portfolios across economic cycles.