GP-Led Secondaries: Shaping the Future of Private Equity

Record $48 Billion in H1 2025 Marks a Structural Shift Toward Continuation Funds, Strategic Liquidity, and Alignment-Driven Growth

Introduction

While the secondary market historically served as a liquidity outlet for limited partners (LPs) seeking early exits, today, GP-led continuation funds, tender offers, and other structured solutions have transformed it into a proactive tool that allows general partners (GPs) to actively shape portfolio outcomes and optimize fund structures. This shift reflects a broader trend in private equity, where capital efficiency, asset longevity, and strategic flexibility have become central to fund management.

For GPs, GP-led transactions provide several distinct advantages. Continuation funds and tender offers allow managers to retain high-performing assets beyond the traditional fund life, giving them the opportunity to extend ownership, generate incremental returns, and offer optional liquidity to existing investors. These transactions also enable GPs to attract new investors, sometimes under more favorable terms, while maintaining alignment with existing LPs. By turning what was once a reactive liquidity mechanism into a strategic lever, GP-led structures are now integral to fund lifecycle management, capital deployment, and investor engagement.

Market trends underscore the growing importance of this segment. Middle-market companies—with EBITDA ranging from $20 million to $250 million—dominate GP-led activity, representing a combined 77% of continuation vehicle volume in 2024. Small-cap companies ($20–100 million EBITDA) accounted for 42%, while mid-cap companies ($100–250 million EBITDA) represented 35%, reflecting a sweet spot where GPs balance growth potential and risk mitigation. In contrast, micro-cap and large-cap companies collectively accounted for less than 15% of GP-led volume, highlighting the continued focus on the middle market as the primary arena for these transactions.

The evolution of GP-led secondaries also reflects broader shifts in private equity strategy. Investors increasingly favor structures that provide continuity, downside protection, and enhanced visibility into high-quality assets, while GPs leverage these transactions to maximize value, maintain operational control, and extend the lifecycle of key portfolio companies. As the market matures, GP-led transactions are not only redefining the secondary landscape but also reshaping the way private equity firms approach capital allocation, investor relations, and long-term growth strategies.

Market Overview: Record-Breaking First Half of 2025

GP-led transactions continued to surge in the first half of 2025, reaching $48 billion, up from $31 billion in H1 2024, highlighting the growing centrality of GP-led continuation funds and tender offers in the private equity ecosystem. These transactions reflect how general partners (GPs) are increasingly using secondaries proactively—extending ownership of high-quality assets, providing optional liquidity to investors, and attracting incremental capital—rather than merely responding to LP liquidity needs.

Overall secondaries activity reached a record $102 billion, according to Evercore’s H1 2025 Secondary Market Review, marking the highest half-year total on record. While LP-led transactions accounted for $54 billion (53% of total volume), their growth—driven by pensions, endowments, and family offices—serves primarily as background to the structural expansion of GP-led activity.

The continued acceleration of GP-led deals underscores a structural shift in private equity, where continuation vehicles and tender offers are not just reactive tools but strategic levers shaping fund structures, portfolio management, and investor engagement. With managers increasingly focused on retaining and enhancing high-performing assets, the GP-led segment is now a primary driver of secondary market growth and a key lens through which the private equity landscape is evolving.

Deployment by Strategy

GP-led secondaries in 2024 remained overwhelmingly concentrated in Buyout strategies, which comprised 82% of total market volume. Although this share fell slightly from 86% in 2023, the absolute volume of Buyout transactions continued to grow, reflecting investors’ preference for mature, control-oriented assets with stable earnings and proven business models.

Growth Capital & Venture Capital strategies accounted for 8% of GP-led transactions, up from 6% in 2023. This expansion highlights the increasing maturity of the growth ecosystem, as narrowing bid-ask spreads and more stable valuations have made these deals more attractive to secondary investors.

Credit strategies also gained momentum, rising to 4% of total GP-led volume in 2024, driven by the expansion of Credit secondaries funds and investor demand for exposure to maturing private credit portfolios. This shift reflects how private credit is becoming a more prominent pillar of GP-led dealmaking.

Meanwhile, Real Assets transactions held steady at 6%, providing investors with hard-asset exposure but maintaining a smaller share compared to Buyouts.

Taken together, the data demonstrates that while Buyouts remain the clear anchor of GP-led activity, diversification is underway. Growth, Credit, and Real Assets strategies are steadily gaining ground, pointing to a more balanced and multi-dimensional GP-led market as it evolves through 2025.

Market Volume by Transaction Type

Within the GP-led segment, single-asset continuation vehicles have consolidated their position as the dominant structure, representing 48% of total GP-led volume in 2024, up from 39% in 2023. Investors continue to favor these deals for their high-quality underlying assets, stronger GP alignment, and sector-specific focus. Sector distribution was balanced across technology, healthcare, and business services, with technology transactions showing the sharpest year-on-year increase, rising from 12% to 19% of all single-asset activity.

From a pricing perspective, single-asset deals also demonstrated remarkable resilience. Roughly 87% priced at or above 90% of NAV, and more than half (56%) cleared at or above par. Such pricing signals both buyer confidence in GP valuations and asset performance, and the growing competitive dynamics among secondary buyers for top-tier opportunities.

By comparison, multi-asset continuation funds accounted for 31% of GP-led volume in 2024, down from 38% in 2023. Pricing here has been more conservative, with ~71% of transactions pricing at or above 90% of NAV—a notable improvement from 59% in 2023, yet still lagging the premium levels achieved by single-asset vehicles. Other structures, such as tender offers (3%) and preferred equity/structured solutions (15%), maintained a smaller but meaningful share of market activity, highlighting the growing variety of options available to both LPs and GPs.

Overall, the data underscores the increasing centrality of single-asset deals to the secondary market, reflecting investor appetite for targeted exposure to blue-chip assets and the willingness to pay closer to par for high-conviction opportunities.

Deployment by Industry

Sectoral deployment patterns for single-asset continuation funds in 2024 highlight the growing concentration of activity in a few industries. Technology, Healthcare, Business Services, and Industrials together accounted for ~67% of single-asset fund transactions by volume, underscoring investor preference for resilient business models with proven cash flow and defensible market positions.

Technology emerged as the single most active sector, rising sharply from 12% in 2023 to 19% in 2024. Investors were drawn to recurring SaaS business models, consistent earnings profiles, and high-margin scalability, making the sector the clearest beneficiary of continued appetite for growth and durability.

Healthcare activity, while still elevated, moderated from 25% in 2023 to 17% in 2024. Secondary buyers grew more cautious around EBITDA adjustments, leverage levels, and multiple arbitrage potential, particularly within Healthcare Services. This relative decline reflects more selective underwriting rather than a structural retrenchment, given the sector’s strong fundamentals and long-term growth drivers.

Business Services remained steady at 16% of activity, reflecting enduring demand for resilient, asset-light service models. Industrials, by contrast, saw a decline from 22% to 15%, though the sector continues to benefit from exposure to infrastructure, automation, and supply chain reconfiguration themes.

Outside the top four, Consumer & Retail modestly increased to 11% of transactions, with notable support for franchisor/franchisee models characterized by strong cash flows and defensible brands. Power, Energy & Infrastructure also expanded from 2% to 4%, while Financial Services (6%), Real Estate (1%), and Telecom/Media/Entertainment (4%) maintained smaller shares of activity.

Taken together, the industry breakdown reinforces that while investor demand is broad-based, the secondary market remains oriented toward sectors with recurring revenues, scalable platforms, and strong downside protection—attributes particularly prized in an environment of tighter liquidity and sustained macro uncertainty.

Continuation Vehicle Volume by Company Size

The evolution of GP-led secondaries is further illustrated by the distribution of continuation vehicle (CV) volumes by company size, measured by EBITDA. According to Morgan Stanley’s Continuation Fund Market Review for FY 2024, middle-market companies—those with EBITDA ranging from $20 million to $250 million—dominate continuation fund activity. In 2024, small-cap companies ($20 million to $100 million EBITDA) represented 42% of CV volume, while mid-cap companies ($100 million to $250 million EBITDA) accounted for 35%. Together, these segments comprised 77% of overall continuation volume, slightly down from 84% in 2023 but still clearly the focal point for GP-led secondary transactions.

This concentration in the small- and mid-cap market segments reflects a sweet spot where GPs balance growth potential and risk mitigation. Companies in this range tend to have established revenue streams and growth trajectories, making them attractive for extension through continuation funds. The slight shift observed from small-cap toward mid-cap percentages year-over-year suggests growing confidence in larger, more mature companies as suitable candidates for GP-led strategies.

In contrast, micro-cap (under $20 million EBITDA) and large-cap companies ($250 million to $500 million EBITDA) represent relatively smaller portions of continuation volume, at 8% and 6% respectively in 2024. Mega-cap companies with EBITDA exceeding $500 million accounted for 9% of continuation volume, indicating that while sizable platforms do participate, the majority of GP-led extensions are concentrated in the middle market.

The data underscores how GP-led secondaries are fine-tuning their focus toward companies that exhibit resilience, scalability, and proven earnings profiles, aligning with overall investor preferences for continuity and downside protection in private equity portfolios.

Alignment and Liquidity Dynamics in GP-Led Continuation Funds

A crucial aspect underpinning the success and appeal of GP-led continuation funds is the alignment between general partners (GPs) and investors. Nearly 90% of continuation fund deals in 2024 involved active GPs rolling 100% of their available proceeds into the continuation vehicle, reinforcing their commitment to the assets and fostering confidence among secondary market participants. This commitment is essential, as strong GP alignment often translates into more effective management and value creation during the continuation period.

Management teams also play an increasingly flexible role in liquidity dynamics. While the proportion of continuation funds where management took zero liquidity decreased from 45% in 2023 to 30% in 2024, there has been a rise in deals allowing management liquidity between 1% and over 50%. Notably, 38% of continuation funds in 2024 permitted management liquidity between 25% and 50%, up from 20% in the prior year. This shift reflects evolving investor acceptance of providing material liquidity to management, recognizing its importance in incentivizing key personnel while balancing investor interests.

Investor prioritization of these liquidity structures complements the broader GP-led market growth, underscoring how continuation funds are not only mechanisms for portfolio extension but also vehicles to enhance alignment and motivate management. These liquidity arrangements are shaping deal-making strategies by providing tailored capital solutions satisfying the nuanced requirements of GPs, management teams, and secondary investors alike.

Conclusion

The GP-led segment of the secondary market has firmly established itself as a strategic cornerstone in private equity, transforming the way capital is deployed, portfolios are managed, and investor relationships are structured. Across 2024 and the first half of 2025, the rise of single-asset continuation vehicles, tender offers, and structured solutions has underscored the growing sophistication and centrality of GP-led transactions.

Middle-market companies continue to dominate GP-led activity, providing a balance of growth potential, risk mitigation, and scalability that aligns with both GP and investor priorities. Simultaneously, evolving alignment and liquidity structures—including high GP roll rates and increased management liquidity—illustrate how these transactions are designed to maximize value, incentivize key personnel, and maintain strong investor confidence.

As the market matures, GP-led secondaries are no longer simply reactive tools for liquidity; they have become proactive mechanisms enabling GPs to extend ownership of high-performing assets, optimize fund structures, and shape long-term investment outcomes. For investors and managers alike, the continued expansion of GP-led activity signals a more resilient, flexible, and strategic private equity ecosystem, where tailored solutions, disciplined execution, and alignment-driven structures define the path forward.

Looking ahead, GP-led secondaries are poised to remain the primary driver of secondary market growth, reinforcing the segment’s central role in capital efficiency, portfolio management, and value creation. For private equity professionals, understanding these dynamics is no longer optional—it is critical to navigating the evolving landscape of 2025 and beyond

Sources and References:

Evercore: H1 2025 Secondary Market Review

https://www.secondariesinvestor.com/secondaries-volume-surpasses-100bn-to-reach-half-year-record-evercore/

Lazard Private Capital Advisory: Lazard 2024 Secondary Market Report

https://lazard.com/media/drch42gk/lazard-2024-secondary-market-report.pdf

William Blair Private Capital Advisory: 2025 Secondary Market Report & Survey

https://www.williamblair.com/-/media/downloads/ib/2025/williamblair-pca-secondary-market-report-survey-march-2025.pdf