

The secondary market is evolving at a rapid pace, presenting both opportunities and challenges for managers. As transaction types—ranging from GP-led and LP-led deals to direct secondaries, credit secondaries and portfolio financing—proliferate, the complexity of the market grows. Each transaction type carries its own risk profile, adding to the operational demands on managers tasked with navigating this environment. We recently examined these challenges in our recent report, produced in partnership with Private Equity Wire.
A key factor driving growth in the secondary market is its untapped potential, with less than 2% of private assets under management currently represented. However, this growth trajectory raises questions about whether managers are prepared to handle the increasing scale and complexity. Among the most pressing challenges cited by market participants are seller apprehension, structural incapacity to scale and operational inefficiencies.
Almost a third (31%) of managers who responded to our survey cited seller apprehension was their biggest challenge. While this challenge is gradually diminishing due to narrowing valuations and increased market awareness, structural and operational limitations remain as obstacles. Our survey showed that more than one-fifth of managers (21%) identify structural incapacity to scale as a key challenge, while operational inefficiencies, such as inadequate data management and process bottlenecks, ranked third.
To support sustained growth, secondary managers must prioritize building a scalable operational and digital infrastructure. The next phase of growth hinges on enhancing portfolio management, improving process efficiency and advancing data ingestion and aggregation capabilities. Robust due diligence processes, reinforced by high-quality data and advanced analytics, are essential to identifying and executing the right deals in an increasingly competitive market.
Operational intensity is expected to rise further as the market expands. This shift underscores the need for a comprehensive, tech-driven data strategy that can align with diverse operating models across organizations and regions. Conversations around innovations like the tokenization of secondary positions hint at even greater complexity in the future, potentially mirroring the challenges faced in retail markets.
Ultimately, the secondary market’s success will depend on managers’ ability to adapt their operational frameworks to meet growing demands. By investing in technology and data strategies, managers can streamline processes, enhance decision-making and better position themselves to capitalize on opportunities.
To learn more about the opportunities and challenges stemming from the rapid growth in the secondary market, read the full report.
Managing Director, Head of International Private Markets