The secondary market is in a boom cycle, and a growing number of LPs are set to come to market for the first time this year, several of the largest secondary buyers and service providers told PitchBook.
“Many first-time secondary sellers will come to market this year, because, if they don’t, LPs are going to be in a position where, if they wait for the market to give them liquidity, they’re going to miss out on vintages,” said Joseph Smith, a partner at law firm Schulte Roth & Zabel, where he advises on fund formation and both GP- and LP-led secondary transactions.
LPs that have historically avoided the secondary market often perceived it as a domain for distressed sales. But that stigma, Smith said, is now broken as high-profile sales flood the market and allocators grapple with mounting liquidity needs.
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Already, two of this year’s largest transactions came from first-time sellers: The Yale University endowment‘s sale of $2.5 billion of its PE and VC assets marked the first time it sold a substantial portion of its private portfolio on the secondary market, and the New York City pension system’s $5 billion sale of PE holdings to lead buyer Blackstone Strategic Partners was also that pension’s first.
LP-led transactions comprised the majority of total volume last year, reaching a record $87 billion, according to Jefferies data. Of that, 40% came from first-time sellers, a similar proportion as in the past couple of years.
Related read: The year of the $1B+ secondary
After four consecutive years of declining exits in the private markets, ever-slowing distributions to LPs and increasingly infrequent capital calls, more investors are turning to the secondary market for liquidity than ever before. Last year, global secondary market transaction volume (both LP- and GP-led) reached a record $162 billion, surpassing the previous record of $132 billion in 2021, according to Jefferies data.
More new entrants into the market will increase the already burgeoning supply of secondary stakes, but industry players don’t believe they will materially impact pricing or the quality of assets that come to market.
‘If you’re not selling, you’re really the exception’
Still, it may be too early to tell whether first-time sellers will comprise a larger portion of transaction volume by year’s end.
One prominent buyer said that only a handful of deals that came across her desk in the first six months of the year came from first-time sellers.
Another lawyer who specializes in secondary transactions said that she is aware of several portfolios coming to market in the next few months, and it’s a healthy mix of first-time and repeat sellers.
“But I don’t know that I’ve seen a definitive uptick in first-time sellers,” the lawyer said.
Mathieu Dréan, managing director in Houlihan Lokey‘s Capital Solutions Group, where he advises on LP-led secondary transactions, said that the majority of the potential deals that he saw in H1 have been sourced from repeat clients.
But he said that generally, buyer demand and attractive pricing tend to draw more LPs—both first-time and repeat. Even with a higher volume of deals, he expects a similar proportion to come from first-time sellers.
“The main driver is [buy-side] demand. Demand and volume drive up prices, and then prices trigger sellers,” Dréan said.
Another large secondary buyer agreed, adding that while he’s seen more first-time LPs coming to market and with larger swaths of their portfolios, growing transaction volume means that the first-time sellers’ market share will remain about the same as last year.
Buyers have loaded up on cash to meet the supply: While PE fundraising declined nearly 30% from Q1 2024 to Q1 2025, capital commitments to vehicles dedicated to buying into the secondary market grew by 51.6%, according to PitchBook’s latest Global Private Market Fundraising Report.
Peer influence also plays into first-time sellers coming to market, according to Dréan.
“Before, [LPs] maybe heard of two or three of their peers who had sold. Now they hear about eight or 10 or 12 of their peers selling,” he said. “If you’re not selling, you’re really the exception.”
Featured image by MirageC/Getty Images
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