Secondary Market Mid-2026: Where Capital Is Compounding

Global secondary market volume hit 162Bin 2024 and is tracking toward 185B in 2025 (Evercore PCA Annual Survey, H12025). The capital compounding here is not incremental. It is structural, andit is rewriting how growth-stage founders should think about liquidity, LPbehavior, and the definition of an exit.

The185B print is a structural reset, not a cycle blip

Secondarytransaction volume tripled from 60B in 2019 to a projected 185B in 2025(Evercore PCA Annual Survey, H1 2025). LP-led deals now account for roughly 55percent of that volume, with GP-led continuation vehicles making up the balance(SSGA Private Markets Outlook, 2025). Both halves are compounding, but fordifferent reasons, and the reasons matter more than the headline.

LP-led volume isgrowing because portfolio rebalancing has become continuous rather thanepisodic. Family offices and pensions that used to hold GP interests to termare now trimming positions every 18 to 24 months to fund new commitments. Onthe GP-led side, continuation vehicles have moved from a distressed-managertool to a mainstream liquidity mechanism, with roughly 70 percent of 2024continuation deals struck at or above NAV (SSGA, 2025). That last numbermatters. Continuation vehicles at premium pricing signal that secondaries areno longer where funds go when the exit market breaks. They are now a parallelexit path.

For growth-stagefounders, the implication is direct. The definition of an exit for your SeriesB investor has expanded. Where a 2019 investor needed an IPO or strategic saleto return capital, a 2026 investor can clear a position in a continuation vehicleat year seven and still hit their DPI target. That changes how patient themoney on your cap table actually is.

Sovereigncapital is the marginal buyer

Sovereign wealthfunds deployed an estimated 42B into secondaries in 2024, up from 18B threeyears earlier (IFSWF Annual Review, 2024; SWF Institute, Q4 2024). GIC, ADIA,Mubadala, and Temasek have moved from selective secondary buyers toprogrammatic ones, with dedicated secondary allocations now standard in theirprivate markets mandates. The IFSWF data shows sovereign secondaryparticipation growing at roughly 32 percent CAGR since 2021, faster than anyother LP category.

Across ouradvisory work in 2025 and 2026, we observe a related pattern in conversationswith growth-stage founders and their existing investors. When a Series C orlater company has a Middle Eastern or Singaporean sovereign already on the captable, the pressure on that investor to exit at IPO drops materially. Thatcapital was underwritten with a 10 to 15 year horizon, and the sovereignsecondary market gives them a mid-cycle liquidity option that keeps them frombecoming a forced seller into a soft window. The strategic capital on your captable is now genuinely more strategic, because it has options the traditionalVC does not.

The counterpoint.Sovereign secondary demand concentrates in top-quartile funds and top-decileassets. If your Series B was led by a fund outside the top quartile of itsvintage, the sovereign bid is not showing up in your continuation vehicle.Coinlaw's Q2 2025 secondary pricing data shows a 14 percentage point spreadbetween bids on top-quartile GP interests and second-quartile ones, wider thanthe 8-point spread that held pre-2023.

Whatthis means for the term sheet you sign in 2026

Yanne Capital isan independent boutique investment bank advising growth-stage companies onequity, debt, and M&A transactions across 26 sectors, with 240+ closeddeals and relationships with 3,500+ institutional investors globally. We areyour trusted filter between noise and signal. The reason the secondary datamatters to a founder signing a growth-round term sheet in Q4 2026 is that itchanges which investors on the term sheet are actually long-duration capitaland which ones are running a 5-year DPI clock.

Ask the lead thespecific question. What is your fund's remaining investment period, and whatpercentage of your existing portfolio has already been trimmed throughsecondaries in the last 24 months. The answer sorts investors into twocategories. The ones who have used the secondary market to manage liquidity arestructurally more patient with your timeline. The ones who have not, and whoseLPs are pushing for distributions, are the ones who will be applying exitpressure at year six regardless of whether your business is ready to be sold.

The secondarymarket is not a story about liquidity in the abstract. It is a story aboutwhich capital on your cap table can afford to wait for the right exit and whichcapital cannot. That distinction was invisible in 2019. In 2026, with 185B ofannual volume and sovereign capital as the marginal buyer, it is the singlemost useful diligence question a growth-stage founder can ask a prospectivelead.

If you are agrowth-stage founder evaluating a lead investor's actual duration profile aheadof a 2026 raise, or an LP thinking through secondary allocation strategy, reachout at contact@yannecapital.com.

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