09 Jul 2024

Secondaries market set for further growth, driven by GP-led deal activity

  • Almost all (98%) secondaries managers expect their next fund to be larger than their current one as fundraising is expected to rise
  • 82% of managers expect deal volumes to increase by over 10% over the next 12 months
  • GP-led transactions set to drive deal flow, with 75% of respondents expecting to be active in more GP-led deals in the next year
  • Fundraising from high-net-worth individuals is set to contribute to market growth, with 90% of managers expecting more capital from individuals


As liquidity constraints put pressure on the private equity industry, the secondaries market is expected to grow substantially over the next twelve months, with fundraising and deal flow set to expand, according to Investec’s latest Secondaries Report, Charting a course for further growth.

Investec’s latest annual survey found that almost all (98%) managers expect their next secondaries fund to be larger than their current vehicle, with a majority (56%) expecting an increase of between 25-49%, while 12% expect an increase of over 50%.

This bullish market view is mirrored in positive expectations for deal flows over the next 12 months: 80% of managers expect deal flow to increase by 10% or more, with 68% expecting growth in the range of 10-25%.

GP-led continuation funds are anticipated to be a primary area of growth over the next twelve months. Three-quarters (75%) of secondaries managers expect to be more active in GP-led deals, as managers look to unlock mechanisms to distribute investment returns to LPs, at a time where traditional exit routes have been effectively shuttered.

Increasing sophistication

Charting a course for further growth highlights how managers are expanding their investment strategies, integrating asset classes outside of traditional buyouts, and unlocking new pools of capital.

While 30% of respondents expect deal activity across the buyout segments to deliver the biggest source of deal activity over the next 12 months, more than any other asset class, 70% of respondents saw alternative private assets as the fastest growing verticals in their firms – real estate (22%), growth/venture (18%), real assets (18%), and private credit (12%).

Managers are also expanding their fundraising bases, with high-net-worth individuals (HNWI) identified as a primary pool of capital expected to contribute to fundraising growth. Nine in ten (90%) managers expect a growing level of investment from HNWIs in the year ahead.

A return to GP-led transactions

Despite the IPO market slowly opening, Investec’s research shows a strong appetite for GP-led continuation fund deals, which provide a mechanism for GPs and LPs to realise value and liquidity from unsold portfolio companies.

According to the survey, single-asset funds are set to remain the dominant form of GP-led deals. However, multi-asset funds are expected to grow in popularity, with over half (60%) of respondents anticipating more interest in multi-asset deals over the next 12 months. 

As part of this growth in demand for continuation vehicles, over half of secondaries managers (52%) want to see GPs increase their fund commitments while also rolling over a meaningful proportion of crystallised carry.

Stefano Manna, Head of GP Advisory at Investec, commented: “This positive outlook for the secondaries market is the result of continued dislocations across the private equity market. As managers have struggled to exit assets at attractive valuations, LPs and GPs alike have turned to the secondaries market as an alternative provider of liquidity.

“Our research has shown the market’s potential to grow over the next 12 months, with a majority of managers anticipating larger funds and increased deal flow, supported by the growth of GP-led activity.

Investec’s Secondaries Report, Charting a course for further growth was based on a survey of 50 global secondaries managers conducted in quarter one of 2024.

Investec has a growing offering across the secondaries market, offering financing to GPs and LPs for a range of applications, as well as bespoke advisory services for GPs.