On September 3, CVC Secondary Partners closed its sixth global secondary fund with $10 billion in commitments. That number deserves a second look. The predecessor vehicle raised $5.8 billion in 2023, and the one before that raised $2.7 billion in 2019. CVC said more than 200 limited partners took part and roughly half the capital came from investors new to the strategy. At a moment when plenty of buyout managers have quietly stretched their fundraising timelines and trimmed their targets, a secondaries fund nearly doubling in size tells you where institutional money currently believes the opportunity sits.
It is not an isolated data point. Evercore’s review of the first six months of 2026 put global secondary transaction volume at roughly $121 billion, about 19 percent above the same stretch last year and the largest first half on record. Jefferies counted around $118 billion, up roughly 15 percent. UBS landed near $117 billion. Advisers tally deals differently, so the precise figure shifts depending on whose report you read, but nobody is arguing about direction. Evercore expects the full year to finish between $250 billion and $260 billion, and Jefferies has said it sees a path toward annual volume approaching $300 billion within the next 12 to 24 months.
Here is why that matters to someone who is not a pension fund. Secondaries used to be an institutional backwater individual investors never touched. That is no longer true. The strategy is now wrapped inside evergreen funds sold through financial advisers, with minimums a tiny fraction of what an endowment would commit. Before deciding whether that is an opportunity, it is worth understanding where the returns have actually come from, because the source is not what most marketing decks lead with.
What Actually Changes Hands
A secondary is the resale of an existing private markets position, and it comes in two flavors. In an LP-led deal, an investor who committed to a fund years ago sells that stake to somebody else, usually because it needs cash or has hit an allocation limit. The buyer inherits the position at a negotiated price relative to the fund’s reported net asset value. Evercore counted about $56 billion of this in the first half, up a modest 4 percent.
The other flavor has become the bigger one. In a GP-led deal, the fund manager itself moves an asset it already owns into a brand new vehicle, a continuation fund, financed by secondary buyers. Existing investors are given a choice: take cash or roll into the new structure. Evercore put GP-led volume at roughly $65 billion in the first half, up about 35 percent, with continuation vehicles built around a single company now the dominant structure in that segment. Notice what is unusual here. The manager sits on both sides of the table, selling an asset to a fund it will keep running, at a price it heavily influences. Disclosure and independent valuation work have improved, and plenty of these deals have worked out well. But it is structurally different from an arm’s length sale, and anyone buying a fund stuffed with continuation vehicles should understand that.
The Overhang Is the Whole Argument
The classic pitch for secondaries is attractive. You buy assets that already exist rather than committing to a blind pool. You can see the portfolio. The holdings are further along, so distributions tend to come back sooner and the J curve is shallower. And, crucially, you often buy at a discount to stated net asset value.
That last point carries the weight, and it is not a law of nature. A discount exists only when sellers want out more than buyers want in. It is supply and demand for capital, nothing more. Which makes one figure in Evercore’s report more interesting than the headline volume. Secondary dry powder stood at roughly $194 billion at midyear, down about 10 percent since January, putting the capital overhang close to 1.0 times trailing twelve month volume. The industry is sitting on about one year of deal flow in committed money. Evercore’s read is that the market has moved closer to demand constrained than supply constrained. Buyers, in other words, currently have leverage.
So what happens when a $10 billion fund closes, and then another, and a wall of evergreen capital lines up behind them? The overhang stops being thin. Pricing power drifts back toward sellers. Secondaries fundraising has already more than doubled over five years, reaching roughly $160 billion in 2025. The condition making the strategy attractive right now is a shortage of exactly the capital retail investors are being invited to supply. That is not a reason to dismiss the asset class. It is a reason to be skeptical of any pitch that presents historical secondary discounts as a permanent feature rather than a cyclical one.
The New Buyer Is Increasingly a Retail Fund
The evergreen wrapper is doing most of the work here. Morningstar PitchBook put the US evergreen fund market at $607 billion across 567 funds as of March 31, up from $590.8 billion and 552 funds at the end of 2025. Direct lending is the largest slice at roughly $236.5 billion, with private equity near $99.3 billion. A majority of secondaries buyers now run evergreen vehicles alongside their traditional closed end funds.
There is real logic to the pairing. Evergreen funds have to meet periodic redemption requests, so they need assets that throw off cash, and secondaries deliver that better than primary commitments because the underlying companies are already seasoned and closer to exit. The fit is genuine. It also creates a dependency worth naming out loud: the fund’s ability to keep buying at attractive prices depends on inflows continuing, and its ability to keep paying redemptions depends on those same assets performing.
The Wrapper Now Has a Track Record
The good news for anyone evaluating this is that evergreen funds are no longer new enough to hide behind projections. The Morningstar PitchBook US Evergreen Fund Index returned 1.6 percent year to date through April 2026, well below the 7.4 percent it produced in 2025. Infrastructure funds led at 5.4 percent. Direct lending trailed at 0.9 percent.
The averages, though, conceal something more important. Over the three years through April, the best performing alternative credit fund in the group returned 34.2 percent net while the worst lost 7.0 percent. In private equity the spread was far wider still: the best fund returned 23.4 percent and the worst lost 65 percent. Morningstar PitchBook’s researchers put it bluntly, noting that picking the wrong manager in this space amounts to a massive impairment of capital. Manager selection is not a footnote in private markets. It is most of the outcome.
Liquidity has been tested too. Robert A. Stanger and Company put repurchase requests at non traded business development companies at 12.4 percent of net asset value in the second quarter, the highest reading it has recorded and up from 10.4 percent in the first. Fitch Ratings reported that ten of the sixteen BDCs it tracks breached their quarterly redemption caps. Fitch also concluded, after analyzing eight rated perpetual non traded BDCs, that their liquidity and asset coverage cushions should support tenders at the maximum 5 percent level for another four quarters even with no new equity. Both findings are true at once. The funds are not broken. They are doing what the documents always said they would, which is queue you.
For context, Morningstar found that close to 94 percent of actively managed funds and ETFs have had at least one quarter with outflows above 5 percent. Investors leaving in waves is not a private markets phenomenon. The difference is what happens next. In a mutual fund the redemption gets paid. In a semi liquid fund it gets prorated and carried into the next window.
Questions Worth Asking
If a secondaries strategy shows up in a proposal, a handful of questions will tell you more than any performance chart. What is the fund actually buying, and in what mix of LP led and GP led deals? A portfolio skewed heavily toward single asset continuation vehicles carries concentrated company risk, not diversified vintage risk. How is net asset value struck, how often, and by whom? What has the fund actually paid out in recent redemption windows, as opposed to what the prospectus permits? What is the total fee load, including whether a performance fee sits on top of fees already charged by the underlying managers? And what does the manager expect to happen to entry pricing if dry powder rebuilds?
The secondaries market deserves its growth. It solves a real problem, which is that private funds hold assets longer than their investors’ patience lasts, and a record first half reflects genuine demand from both sides of the trade. But an argument that rests on scarce capital gets weaker every time a large fund closes. The individual investor arriving in 2026 is showing up to a market in reasonably good shape and, in a small way, helping to compete away the condition that made it appealing. Worth knowing before deciding which side of that trade you are on.
This article is written for educational and informational purposes only and does not constitute financial or legal advice. The views and analytical frameworks presented draw on publicly available information and reported commentary from industry participants. Readers are encouraged to consult primary sources and form their own informed views on these complex topics.
