The private equity secondary market is experiencing record growth—projected to reach $150 billion in 2024, a 25% increase from 2023—despite overall declines in PE deal activity. This growth stands in stark contrast to the broader PE market, which has seen deal values drop by over 40% in Europe and North America between 2022-2023.

Secondary transactions, where investors sell fund stakes mid-lifecycle or GPs arrange company stake transfers, provide critical liquidity in a challenging macroeconomic environment. They offer distinct advantages: LPs gain early exit options and portfolio rebalancing opportunities, while GPs secure additional time for value creation through continuation vehicles and sponsor-led deals.

The market has evolved beyond traditional buyout funds to include venture capital, credit, and infrastructure assets. Notable recent transactions include Bain Capital’s €735 million acquisition of Somacis PCB Industries from Chequers Capital, illustrating how secondary deals can provide liquidity while maintaining strategic continuity.

Despite its advantages, the secondary market faces challenges including information asymmetry between sellers and buyers, valuation complexities without public market benchmarks, and regulatory hurdles. Nevertheless, with interest rate cuts and anticipated business-friendly policies under the Trump administration, the secondary market is positioned to become an essential component of modern PE portfolio management, providing flexibility and capital efficiency.