Private markets found their exit valve: secondaries go from niche to cornerstone

Secondaries stop being the exception

Cambridge Associates argues that the secondary market has evolved from a niche liquidity solution into a cornerstone of private investments, and recommends that institutional investors maintain a minimum allocation of 10% of their private investment commitments to secondaries. The case rests on scale and on behavior: annual secondary transaction volume reached $240 billion in 2025, and 78% of endowments and foundations had exposure to secondaries as of December 31, 2025. m:…5499

The returns argument is comparative rather than absolute. Secondary funds have delivered median internal rates of return broadly comparable to private equity while exhibiting tighter return dispersion, and have averaged 13% distribution to paid-in capital in the first three years of a fund's term. GP-led secondaries represented between 13% and 15% of annual sponsor-backed exit value from 2022 to 2025 — meaning that when sponsors could not sell companies outright, they increasingly sold stakes in them instead. Pension funds, notably, moved the other way, with secondary exposure falling from 45% to 38% between 2015 and 2025. m:…5499

Cambridge Associates adds two conditions that matter for anyone building a program: ILPA guidance recommends that limited partners prioritize transparent disclosures and seek independent validation for GP-led secondary transactions, and a sustainable buy-side approach generally requires dedicated pools of capital and specialized investment professionals. In other words, secondaries reward being set up as a discipline, not as an occasional trade. m:…5499

Advent's $30 billion says the same thing from the other side

Advent International raised $30 billion across its global fund complex, including $27 billion for its 11th flagship fund and over $3 billion for a new mid-market strategy. The firm also opened a new office in Abu Dhabi, operates 18 offices globally, and focuses on five core sectors. On Bloomberg TV, John Maldonado stated that a successful exit begins at underwriting, and that Advent evaluates AI as both an opportunity and a risk. m:…1960

The deal flow attached to the announcement shows what that underwriting looks like in practice: Advent is investing Rs 3,150 crore in Yatharth Hospitals for a 24.9% stake, announced a majority investment in NZCR Group, and is acquiring FNZ Bank, while CVC Capital Partners agreed to acquire Irca from Advent. A $30 billion raise is not, by itself, evidence of anything about returns. It is evidence that limited partners are still willing to fund managers who can point to exits — the same scarcity secondaries exist to relieve. m:…1960

Duration is migrating too

Apollo Global notes a parallel migration on the credit side: Treasury issuance in 2026 has a weighted average maturity of 1.7 years, while US corporate bonds have a weighted average maturity of almost 10 years. Companies are issuing long-term debt to finance long-duration assets — data centers, power generation, grid infrastructure and manufacturing facilities — while the government is issuing short-term debt. Investors with long-term obligations are moving to credit to find duration. m:…6729

Read together, the three items describe one market adjustment. Private investors are buying liquidity through secondaries, funding managers who can underwrite exits, and finding long time horizons in corporate credit rather than in government debt. The open question is whether a market built to relieve illiquidity keeps its discipline once the relief itself becomes the popular trade. m:…5499 m:…1960 m:…6729