Private equity secondaries broke all records in 2024. Transaction volumes hit a staggering $162 billion. This represents a 45% jump from 2023 and beats the previous record of $132 billion from 2021. The balance between GP and LP-led secondaries has changed dramatically. LP-led transactions reached $87 billion, and GP-led deals jumped to $75 billion - a 44% increase from last year.
These shifts in private equity's GP and LP dynamics have opened new doors for smart investors. Family offices now play a bigger role in the secondaries market, which large institutions once dominated. The market saw a significant change when '40 Act funds and evergreen retail vehicles captured almost one-third of secondary market fundraising last year. This increased competition pushed prices higher, averaging 89% of funds' reported NAV. Family offices found their sweet spot between LP and GP led secondaries when distributions to LPs outpaced capital contributions for the first time since 2015. Their flexible approach and long-term vision help them spot market opportunities that bigger institutions don't handle well.
Family offices have changed the traditional dominance of institutional investors in private markets. These once-peripheral players now stand as central figures in the secondaries landscape. They bring fresh capital and unique investment approaches to this growing market segment.
Family offices in the United States manage around $5.4 trillion—more than private equity firms. Their massive financial power combined with structural advantages lets them grab chances that institutional investors often miss.
Family offices work differently than traditional private equity funds. They don't worry about fundraising cycles, distribution mandates, or short-term returns. This freedom lets them make patient, strategic decisions while their institutional counterparts stay tied to strict investment timelines and liquidity needs.
"The power of single and multi-family offices has really accelerated in the last two or three years. They're acting like really big investment houses now with levels of sophistication that's never been there before," notes Peter Hughes, founder and CEO of Apex Group.
Family offices invest quite differently from institutional investors. Recent surveys show:
Family offices manage an average of $1.1 billion, with typical net worth around $2.7 billion
Nearly 60% of family offices see AI/technology as a "strong chance," compared to just 40% of institutional investors
Family office allocations to secondaries doubled during 2023 compared to the previous three-year average
Family offices show greater interest in certain alternative investments. About 89% invest in venture capital compared to 44% of institutional investors. Every family office has private equity exposure, while only 76% of institutions do.
Their readiness to take on higher-risk, less liquid investments shows their contrarian, opportunistic approach. A UBS survey of 230 family offices managing nearly $1 billion in assets found they planned to invest heavily in the secondaries market.
Higher interest rates have changed how private market investments work. Secondaries have become an attractive strategy during this time for good reasons.
Long-term borrowing costs have made private equity transactions more complex. The secondaries market provides a way to rebalance portfolios and manage liquidity when these functions matter most.
Institutional investors use secondaries to move their exposure around and fix overcommitment issues. This becomes crucial as rising rates put pressure on capital calls. Family offices can buy quality assets at good prices because of this trend.
Secondaries match perfectly with family offices' strategic flexibility. Henri Steenkamp, CFO of Saratoga Investment Corp., says: "Institutional investors use secondaries to reallocate exposure strategically, leveraging the market to address overcommitment issues or reposition portfolios toward higher-conviction strategies".
Tailored secondary strategies let family offices target assets with specific cash flow profiles that can handle rate pressures. This focused approach reduces risk while keeping strong returns as market conditions keep changing.
Secondaries often involve buying already-appreciated assets below net asset value. Investors can avoid the J-curve effect that affects early-stage private market investments. This leads to faster returns with better transparency.
Secondary transactions in private equity have grown far beyond simple fund interest sales. Family offices need to understand the key differences between LP and GP-led secondaries to position themselves strategically.
LP-led secondaries follow a traditional model where limited partners sell their fund interests to third-party buyers. These transactions transfer ownership without changing the fund's structure. LPs lead the process based on their financial needs, while the GP's role stays focused on transfer facilitation.
GP-led transactions work differently. The general partner coordinates these deals, which often involve restructuring existing funds or moving chosen assets into continuation vehicles for longer holding periods. Current LPs can either sell their stake or move it to the continuation fund, while you retain control of the process.
These two approaches differ greatly in complexity. GP-led deals need thorough due diligence and negotiations to line up everyone's interests. LP-led transactions follow a simpler path. This added complexity shows how GP-led deals go beyond just transferring ownership.
Each party brings distinct goals to these transactions. LPs use secondaries to get liquidity, balance their portfolios, or reduce unfunded commitments. Many LPs see secondaries as a way out of illiquid investments they'd otherwise hold until the fund ends.
GPs take a different approach. They launch secondaries to build more value by extending the life of their best-performing assets. The largest longitudinal study shows continuation funds make up about 80% of GP-led transactions. These vehicles give GPs extra time and money to grow portfolio companies they believe have untapped potential.
This difference in goals creates natural tension. LPs want flexibility and quick access to cash, while GPs want to maximize value through longer control periods. All the same, this tension has led to breakthroughs that work for both sides.
GP-led transactions now make up about 36% of secondary deals, which points to a radical alteration in the market. These deals have grown from simple fund restructuring tools into sophisticated portfolio management solutions for top-tier GPs.
Several factors fuel this growth. Continuation funds let LPs cash out while GPs keep their best assets. Instead of selling promising companies to competitors, GPs now team up with secondary investors to maintain ownership and give LPs flexible exit options.
GP-led deals focus on "crown jewel" assets that could deliver exceptional returns. Family offices with strong analytical skills can partner with outstanding management teams to create long-term value.
These secondaries offer unique advantages that traditional exits can't match. They help individual LPs manage specific timing and cash flow needs while GPs extract more value from select assets. Family offices with patient capital and clear investment strategies find this customization especially appealing.
This development shows how secondaries have evolved from basic liquidity tools into sophisticated portfolio management instruments that strategic family office investors find attractive.
Family offices now dominate the secondaries market. Their unique structure gives them an edge over institutional investors. These sophisticated investors are changing how GP vs LP led secondaries work by breaking free from traditional fund constraints.
Family office's strategic position lets them exercise unmatched control in secondaries. They can act as both buyers and sellers - a flexibility that institutional investors rarely have. This dual-role ability helps them adapt quickly to market changes.
Customization adds another advantage to their arsenal. They can negotiate special terms in LP vs GP led secondaries deals. These terms include better fees, stronger governance rights, and improved information access. Their multi-generational investment approach, rather than traditional fund cycles, makes this tailoring even more valuable.
Family offices also excel at co-investment opportunities. They get direct exposure to specific assets without full fund commitments by joining GPs in continuation vehicles. This selective strategy lets them focus capital on their best opportunities while building relationships with top fund managers.
Family offices use portfolio rebalancing through secondaries as a refined strategy to optimize asset allocation. These investors leverage GP vs LP led secondaries to:
Adjust sector exposures without disrupting core positions
Manage vintage year diversification efficiently
Accelerate or decelerate private market deployment based on macroeconomic conditions
They're fluent in finding inefficiencies in secondaries pricing. Discounts aren't seen as warning signs but as chances to buy quality assets at good prices.
Continuation vehicles (CVs) help family offices access promising assets typically locked in fund structures. GP led secondaries open doors to companies with strong track records and room to grow.
The timing creates a strategic advantage. Family offices invest after early improvements but before full value realization. This mid-lifecycle entry removes early risks while keeping significant growth potential.
CV structures create better alignment between family offices and general partners. Both sides invest more capital in these vehicles. Their interests join around long-term value creation instead of rushing toward exits to meet standard fund deadlines.
Ultra-high-net-worth investors value these vehicles for continuity. GP led vs LP led secondaries let family offices keep their stake in valuable assets beyond normal fund end dates. This matters greatly to investors who care more about building legacies than quarterly performance.
State-of-the-art fund structures have revolutionized GP vs LP led secondaries and created unprecedented access points for sophisticated investors. The development goes way beyond traditional closed-end funds into territory that promises improved liquidity and strategic flexibility.
Evergreen structures have changed how investors interact with private markets. These vehicles eliminate the traditional drawdown period and provide immediate exposure to diversified portfolios. The capital automatically recycles into new deals without requiring additional outside capital when GPs exit positions. This perpetual investment cycle creates environmentally responsible exposure that appeals especially to multi-generational family offices.
These structures have changed pricing dynamics and return expectations in LP vs GP led secondaries. Both institutional and individual investor behaviors reflect this change. Their semi-liquid nature offers a middle ground between traditional closed-end illiquidity and open-end volatility through periodic liquidity windows.
Registered '40 Act funds mark a watershed moment for GP vs LP led secondaries in 2025. These vehicles raised over $5 billion in the secondaries space before September 2024. This created substantial retail dry powder ready for deployment.
These structures prefer LP-led transactions with older vintage funds. Such deals provide significant cash flow from funds beyond their investment period. Retail investors seeking faster returns find this characteristic appealing.
Some '40 Act funds have shown aggressive pricing behavior. They sometimes pay 500-1000 basis points higher than cover bids on transactions. Institutional investors looking to seed new portfolio positions benefit from this competitive dynamic.
The secondaries market features innovative deal structures that bridge valuation gaps between buyers and sellers. Earn-outs have become powerful tools in GP led vs LP led secondaries. These contingent payments based on future performance metrics help parties line up incentives around post-transaction success.
Hybrid fund structures combine elements from multiple investment vehicles to access diverse asset classes among these:
They permit redemptions at specified intervals while you retain control with underlying asset liquidity
They offer greater flexibility in fee structures, drawing from both incentive fees and carried interest models
They allow ongoing capital contributions outside traditional fundraising periods
These creative structures help family offices customize their LP vs GP exposures precisely. They can craft arrangements that match their specific investment horizons and risk priorities.
The secondaries landscape shows a notable capital gap despite record fundraising headlines. This creates both challenges and opportunities for smart investors who understand the market's subtleties.
The secondaries market struggles with a severe capital shortage even as it grows. Dry powder currently stands at just 1.3 times 2023 transaction volume or 1.1 times expected 2024 volume. The supply-demand mismatch becomes even more obvious in GP-led transactions where investors earmark available capital mostly for traditional LP deals. Secondary funds raised about $185 billion yet deployed around $350 billion throughout 2021-2023. This means they raised only 53 cents for every dollar invested. Investment bank PJT Partners points to "the lack of investor capital given the rising supply" as the market's biggest challenge.
GP-led secondaries' growing prominence brings certain structural risks to light. Reports show top five GPs made up nearly 70% of total capital raised in these transactions. The top eight firms hold over half of available dry powder. The SEC has turned its attention to potential conflicts of interest between various stakeholders. Single-asset continuation vehicles add more exposure to individual company performance. Family offices looking at these structures should know that LPAC members with bigger commitments might face fewer liquidity constraints than smaller investors. This could create misalignment during transaction approval.
VC secondaries offer an overlooked yet growing segment that reached $17 billion in transaction volume last year. Experts project it to hit $22 billion in 2024. Venture made up just 9% of secondary transactions by volume in 2018, which shows room for growth. Commonfund sees chances to buy at 15-20% discounts by targeting venture and emerging markets instead of crowded large-buyout sectors. Almost every late-stage venture or growth fund now talks about secondaries. This creates entry points for investors ready to handle these complex transactions.
Family offices face a turning point in the changing secondary market landscape of 2025. These sophisticated investors have unique structural advantages over their institutional counterparts. Their patient capital, multi-generational time horizons, and quick decision-making line up perfectly with today's secondaries market dynamics.
The market's changes go beyond record-breaking volumes. GP-led transactions have become strategic portfolio management tools rather than simple liquidity solutions. Family offices see this progress as a structural realignment that rewards their natural flexibility.
The secondaries capital gap creates clear opportunities for family offices ready to deploy capital strategically, though it challenges the broader market. Family offices can move decisively through this supply-demand imbalance, especially when they have access to overlooked segments like venture capital secondaries. Large institutions remain restricted by allocation constraints.
New evergreen structures and '40 Act funds have altered the map of traditional secondaries access points. These vehicles give family offices fresh ways to keep their high-conviction assets beyond standard fund termination dates—a vital consideration for legacy-focused investors.
The secondaries market offers family offices a rare edge over institutional giants. They can act as both buyers and sellers while negotiating custom terms, which puts them in control. Sophisticated family offices now see GP vs LP led secondaries not as an either/or choice but as complementary tools within a complete private market strategy.
Some risks exist around GP concentration and potential conflicts of interest. However, family offices with proper due diligence capabilities can capitalize on secondaries' structural inefficiencies. Their distinctive advantage and patient capital approach suggest they will keep expanding their influence throughout the secondaries ecosystem. This shift fundamentally changes the power balance between traditional institutions and private wealth.
Q1. What are GP-led secondaries and how do they differ from LP-led transactions? GP-led secondaries are transactions orchestrated by the general partner managing a fund, often involving restructuring or moving assets into a continuation vehicle. They differ from LP-led transactions, where limited partners sell their fund interests, by offering more control to GPs and potentially creating additional value for high-performing assets.
Q2. Why are family offices increasingly interested in the secondaries market? Family offices are drawn to secondaries due to their flexibility, long-term investment horizons, and ability to capitalize on market inefficiencies. They can act as both buyers and sellers, negotiate customized terms, and access high-conviction assets through continuation vehicles, aligning well with their multi-generational investment approach.
Q3. How are evergreen funds changing the private equity landscape? Evergreen funds are reshaping private equity by eliminating traditional drawdown periods and offering semi-liquid structures. They provide immediate exposure to diversified portfolios, automatically recycle capital from exited positions, and offer periodic liquidity windows, making them particularly attractive to long-term investors like family offices.
Q4. What risks should investors be aware of in the growing GP-led secondaries market? Key risks in GP-led secondaries include concentration among top GPs, potential conflicts of interest between stakeholders, and increased exposure to individual company performance in single-asset continuation vehicles. Regulatory scrutiny, particularly from the SEC, is also increasing in this space.
Q5. Are there overlooked opportunities in the secondaries market? Venture capital secondaries represent a rapidly expanding and often overlooked segment, with transaction volumes projected to reach $22 billion in 2024. This area offers opportunities to purchase assets at significant discounts, particularly for investors willing to navigate the complexity of these transactions.