What Slowing Secondaries Fundraising Means for Private Market Liquidity
Featured In: FundFire
David Goldstein, director of product in the fund services division at STP Investment Services, was featured in a recent FundFire article examining how secondaries fundraising is evolving as liquidity pressures continue across the broader private markets landscape.
Read the original article on FundFire: Secondaries Fundraising Slackens Even as Liquidity Pressures Mount
The Bigger Picture
Secondaries fundraising has had a strong run in recent years, with investors showing continued interest in the strategy even as commitments to other private asset classes, including buyouts and private credit, slowed. However, recent data cited by FundFire shows that fundraising momentum has softened in 2026, with totals through late July reaching $63 billion and on pace to finish slightly below or roughly in line with 2025’s $116 billion total.
While headline fundraising has slowed, the broader backdrop remains supportive for secondaries activity. Liquidity constraints across private markets have continued to pressure limited partners and general partners, particularly as buyout managers face challenges returning capital and exiting investments. That environment has contributed to continued interest in secondary transactions as investors look for ways to generate liquidity, rebalance portfolios, and create flexibility within private market allocations.
The market is also evolving. According to the article, GP-led secondaries outpaced LP-led transaction volume in the first half of 2026 for the first time since 2022, reflecting growing use of continuation vehicles and other structures designed to address liquidity needs.
Key Takeaways
- Secondaries fundraising has slowed in 2026 after several years of strong investor demand.
- Fundraising totals reached $63 billion through late July and were on pace to finish slightly below or about equal to 2025’s $116 billion haul, according to data cited by FundFire.
- Several large secondaries funds remain in market, which could influence year-end fundraising totals.
- Liquidity pressure in private markets continues to support secondaries deal activity.
- GP-led secondaries activity has increased as managers look for ways to provide liquidity options to investors.
- As volumes and structures become more complex, operational demands and LP scrutiny are expected to increase.
David Goldstein’s Perspective
As highlighted in FundFire, liquidity pressure continues to influence secondaries activity, particularly as general partners evaluate ways to preserve relationships with limited partners and meet liquidity expectations.
“GPs are acknowledging how important their relationship with [their] LPs are, and are attempting to preserve that relationship by meeting initial liquidity parameters set by a fund during its initial close.”
— David Goldstein, director of product in the fund services division at STP Investment Services
This perspective points to a broader shift in how secondaries are being used. Rather than serving only as a niche liquidity solution, secondaries are increasingly becoming part of how private market participants manage investor expectations, portfolio construction, and long-term relationships.
What This Means for Private Market Managers
The slowdown in fundraising does not necessarily signal a weakening role for secondaries. Instead, it may reflect a maturing market where investor capital is becoming more selective and concentrated among established platforms.
For private market managers, this creates both opportunity and pressure. Liquidity constraints remain a persistent challenge, and secondaries can provide a mechanism for LPs seeking flexibility and GPs looking to manage portfolio assets through longer holding periods. However, as the market grows more sophisticated, investors are likely to place greater emphasis on manager quality, transparency, operational controls, and execution capabilities.
The article also points to increasing complexity in secondaries structures. As GP-led transactions, continuation vehicles, and larger portfolios become more common, managers may face heightened expectations around reporting, investor communication, governance, and fund administration.
For firms operating in this environment, operational readiness is becoming increasingly important. Managers need the infrastructure to support complex transaction activity, respond to LP diligence, and manage evolving reporting needs. Strong operations can help firms build trust with investors while supporting scalability as secondaries strategies become more mainstream.
Action Steps for Fund Managers
- Review fund operations and reporting processes to ensure they can support complex secondaries activity.
- Evaluate liquidity planning and investor communication protocols.
- Strengthen governance processes around GP-led transactions and continuation vehicle structures.
- Assess whether current technology and service provider relationships can support increased transaction complexity.
- Prepare for enhanced LP scrutiny as secondaries activity becomes more concentrated and institutionalized.
Frequently Asked Questions
What is secondaries fundraising?
Secondaries fundraising refers to capital raised by investment managers to purchase existing private market interests or assets through secondary market transactions.
Why is secondaries fundraising slowing in 2026?
According to FundFire, secondaries fundraising has slowed after several strong years, although several large funds currently in market could still affect full-year totals.
Why are secondaries still important if fundraising is slowing?
Secondaries remain important because liquidity constraints across private markets continue to create demand for transactions that allow investors to generate liquidity, rebalance exposures, or manage portfolio commitments.
What is a GP-led secondary transaction?
A GP-led secondary transaction typically involves a general partner creating a liquidity option for existing investors, often through a continuation vehicle or similar structure.
Why are LPs using the secondaries market?
The article notes that LPs are using the secondaries market more strategically to generate liquidity, rebalance exposures, and fund new commitments.
What should managers consider as secondaries activity grows?
Managers should focus on operational infrastructure, investor reporting, governance, transparency, and the ability to support increasingly complex fund structures.
Why It Matters
Secondaries have continued to evolve from a niche strategy into a mainstream private markets tool. Even as fundraising momentum moderates, liquidity pressure across private markets continues to drive transaction activity and shape how both LPs and GPs manage portfolios. For fund managers, the opportunity is significant, but so are the expectations. Firms that can pair investment expertise with strong operational infrastructure, investor transparency, and scalable support models may be better positioned as the secondaries market continues to mature.
