Liquidity in Private Markets: The Rise of Secondaries
How the secondary market is reshaping private market investing
Liquidity has long been one of the defining challenges of private markets. However, the rapid growth of the secondary market is beginning to change that dynamic.
According to Goldman Sachs, secondaries have become a key tool for managing liquidity, enabling investors to buy and sell private market exposures more efficiently. The secondaries market now spans private equity, real estate, and private credit, offering both GP-led and LP-led transaction structures. This has created new opportunities for portfolio management, allowing investors to rebalance allocations and access mature assets.
For institutional investors, secondaries provide several advantages:
- Earlier visibility into asset performance
- Reduced blind pool risk
- Greater control over portfolio construction
At the same time, GP-led transactions, such as continuation funds, are becoming more prevalent, enabling managers to hold high-quality assets for longer. This evolution is contributing to a broader trend: the gradual “liquidisation” of private markets. While still fundamentally illiquid, the increasing availability of secondary transactions is enhancing flexibility and access.
As the market continues to mature, secondaries are likely to play an even more central role in private market portfolios.
