Private Equity Secondaries: How to Unlock Discounted Access and Strategic Liquidity. The Complete Private Equity Secondaries Cornerstone Guide.
Why Private Equity Secondaries Matter in 2025
Let me start by acknowledging a truth: If you’ve ever felt private equity is a closed club — opaque, slow, and out of reach — you’re not alone. But in 2025, the secondaries market is rewriting that narrative. Private equity secondaries have transformed from a backwater for offloading old bets into the world’s most dynamic platform for savvy investors seeking value, liquidity, and resilience.
This year, we’re in the middle of a secondaries supercycle. Why now? Because as global markets whipsaw and private fund exits remain scarce, a record $210+ billion is set to trade hands in private equity secondaries—smashing the previous year’s record and cementing secondaries as the primary route for both liquidity and alpha.
Whether you’re an institutional allocator, a family office, or retail investor eyeing iCapital’s new digital marketplace, secondaries offer unparalleled ways to access mature assets, mitigate the J-curve drag, and pounce on distressed deals at deep discounts. More crucially, you can often do so at 90%—or sometimes just 75%—of net asset value (NAV), with potential to skip years of waiting and risk.
But here’s the kicker: the rules of the game are evolving faster than ever. Discounts, portfolio rebalancing tools, co-investments, and opportunistic distressed buying all require fresh strategies in a more transparent but fiercely competitive environment. In this guide, I’m going to break down the secondaries landscape for 2025 and arm you with real examples, practical advice, and the proven strategies shaping this revolutionary frontier.
Private Equity Secondaries 2025: Market Overview and Why This Matters
Let’s paint the picture. In the first half of 2025 alone, global secondary markets saw over $103 billion in deal volume—a staggering 51% surge from the prior year. And the momentum is only building: secondary deal volume is on track to top $210 billion by the year’s close.
Why this explosion? It’s a perfect storm:
- Institutional sellers, from pensions to endowments, are rebalancing after public market dislocations.
- Private fund exits through IPOs or M&A remain sluggish, forcing liquidity seekers toward secondaries.
- Retail and family office capital are pouring in through innovative new platforms like iCapital.
- Buyers, both large and small, are battling for access to mature, high-quality assets—often through sophisticated GP-led transactions and innovative portfolio deals.
On a more granular level, the market is now split almost evenly:
- 54% of volume driven by classic LP-led sales (institutions selling funds for liquidity or strategic reasons).
- 46% coming from GP-led deals—especially single-asset or continuation fund vehicles built around top-shelf companies in a fund’s portfolio.
All of this capital is chasing:
- quicker payback periods (mitigating or skipping the J-curve),
- more transparency around underlying assets,
- sophisticated structuring for both risk and tax optimization,
- and, for brave souls, “vulture” buys in the distressed asset space.
So, as a GroundBanks.com reader, whether you’re hunting for liquidity, chasing yield, or seeking an edge in portfolio construction, the secondaries market now offers a world-class toolkit — if you know how to use it.
How to Buy Private Equity Secondaries at Discounts in 2025
J-Curve Skips and Setter Capital LP Pricing
Let’s go inside the deals. The secondaries market in 2025 isn’t just about trading old, stale fund interests. It’s about tactical, data-driven buying of well-aged—often “J-curve skipped”—private equity stakes, sometimes at mouthwatering discounts to NAV. Here’s how it works and why it matters.
NAV Discounts: The 2025 Reality
In H1 2025, according to Setter Capital and Jefferies, the average LP portfolio traded at 90% of NAV, with buyout portfolios holding steady around 94%. But the opportunity, and strategy, is not simply grabbing what’s offered. Here’s how you go from a decent deal to a spectacular one:
| Fund Type | Average Pricing (% of NAV) | Discount Range (Observed) |
|---|---|---|
| Buyout | 94% | 5–25% |
| Venture/Growth | 78% | 15–35% |
| Credit | 92% | 5–15% |
| Real Estate | 71% | 15–30% |
Table Source: Setter Capital, Jefferies
But the headline numbers hide real opportunity. For mature funds — those past their “J-curve” — discounts can hit 25% or more, especially for sellers eager to rebalance or raise liquidity amid market volatility. If you act decisively (and with the right data), you can buy these bullishly: you skip negative early years, gain visibility into assets, and can often collect distributions far sooner than in primary funds.
Real-life example: In April 2025, a U.S. university endowment sold a $950M basket of 2014–2017 buyout funds at 25–27% discounts to NAV, allowing buyers to enter at a point where underlying companies were already mature, cash-flowing, and partially de-risked.
J-Curve Skipping: The Secret Sauce
The classic J-curve is a nemesis for new PE investors: early capital outflows, slow value realization, and years before positive net returns. By purchasing mature funds in the secondary market, you “skip” this pain:
- Get immediate exposure to companies past their value-drag phase.
- Realize distributions (cash) much faster without waiting a decade.
- Minimize blind pool and vintage risk as outcomes are clearer.
Pro Tip: Always request as recent a data pack as possible, dig into the latest portfolio company performance, and push for discounts if meaningful new exits are expected soon — sellers will sometimes “sweeten” portfolios with newer funds to get better pricing, so negotiate for clarity.
Setter Capital’s role: As one of the industry’s pricing benchmarks, Setter offers up-to-the-minute pricing on literally thousands of funds. Their proprietary analytics and Volume Reports are your best friend for understanding where discounts are trending by vintage, strategy, and sector. Use their semi-annual Price Reports to see historical discount ranges and spot market windows.
Payment Terms and Execution
In 2025, deals are more innovative. Over 37% of transactions include partial deferred payment — often up to 40%. This can let you buy in with less upfront cash (just be mindful of your own IRR calculations).
Key Execution Tip: Due diligence is non-negotiable. Fifteen percent of deals fail — mostly because sellers back out or because of tax/transfer issues. Always lock in clear transfer rights and get your tax/legal reviewed up front.
Actionable Takeaways
- Hunt for mature portfolios: Pitch a 15–25% discount for pre-2020 vintages, especially from motivated sellers like endowments and pensions.
- Use Setter Capital and Jefferies data as your compass: Real-time analytics save you from overpaying.
- Ask for sweeteners: Politely demand documentation showing underlying company performance and push for inclusion of newest, best-performing funds.
- Negotiate payment terms: Ask for a deferred or structured payment; it’s more common than ever.
LP Portfolio Rebalancing via Secondaries: The 2025 Playbook
Timing Sales with Preqin Vintage Data
Why are so many institutions turning to the secondary market in 2025? Simple: With traditional exits still sluggish (IPOs and M&A are sputtering), LPs need new ways to unlock liquidity — ideally without suffering “drag” penalties or forced-fire-sale pricing.
According to Preqin’s 2025 data, over 50% of secondary market sellers are motivated by liquidity and portfolio rebalancing needs, especially pensions, endowments, and insurance companies who must keep their allocations in check when public markets get volatile.
How Secondaries Create Value
- Unlock up to 15% of book value: Data shows LPs routinely access 10–15% liquidity without unduly affecting remaining fund performance. The key is to sell tranches, not entire books, and prioritize non-core or tail-end interests.
- Minimal drag penalty: By waiting for favorable Preqin “vintage windows” and partnering with established secondary buyers, a well-constructed sale can keep performance drag under 2%—far less than panic-selling into volatile public markets.
Real-Life Rebalancing in 2025
A top five U.S. public pension fund rebalanced its $8 billion private equity book in early 2025, selling about $950 million in older, non-core funds at a weighted 15% discount. This allowed it to meet new target allocations and generate cash without dipping into publicly traded assets. By timing the process alongside positive private NAV updates and leveraging Preqin’s recent vintage data, they achieved high pricing on newer funds and muted discounts on the oldest ones.
LP Secondary Sales—Motivations, Volume, and Pricing in 2025 Table
| Motivation Type | % of Sales | Average Discount | Typical Seller | Key 2025 Trend |
|---|---|---|---|---|
| Opportunistic liquidity/rebalancing | 48% | 10–15% | Pensions, Insurance | Unlocking target cash w/o drag |
| Administrative clean-up/wind-down | 25% | 20–30% | Endowments, FoFs | Legacy portfolio tail dibs |
| Non-core manager reduction | 23% | 15–25% | Family offices, Banks | Strategic realignment |
| De-risking, locking in returns | 4% | 5–10% | All | Permanent asset allocation shift |
Source: Jefferies, Preqin, Setter Capital
Actionable Advice for Sellers
- Leverage Preqin vintage data to time your sale: Wait for periods when NAV momentum is positive across your book, and focus on funds that have distributed well in the past year.
- Tranche your sale: Sell legacy funds first, retain newer high-conviction managers; use portfolio “sweeteners” if you want to maximize pricing on harder-to-sell funds.
- Don’t wait for forced liquidity: Early-mover sellers in 2025 have realized stronger prices; late sellers face greater competition as more supply hits the market.
- Use an intermediary for process discipline: A reputable platform (Setter, Jefferies, Lazard) can manage the buyer universe and negotiating process, driving bid tension and pricing.
Co-Investment Secondaries for Retail in 2025: Access through iCapital’s Marketplace
The New Era of Accessible Alternatives
Here’s something that would have been unthinkable five years ago: In 2025, retail and high-net-worth investors are not just participants in the secondaries market — they are increasingly the linchpin. Platforms like iCapital and Tangible Markets have democratized access to “sidecar” and co-investment secondaries, allowing individuals to buy into PE deals at terms once reserved only for institutional whales.
How does it work? Through these digital marketplaces, you can now:
- Buy secondary stakes as small as $75,000 or as large as $250 million in closed-end or semi-liquid funds.
- Seize sidecar co-investment opportunities—get up to 20% increased exposure to mature assets, typically at primary terms, not inflated prices.
- Enjoy regular secondary auctions: Eligible investors get notified of live deals where buyers and sellers are matched in a transparent process.
Why This Is a Game-Changer
- J-curve mitigation for individuals: These secondaries often relate to assets already in distribution phase = quicker payouts, lower drawdown risk.
- Primary term pricing: iCapital’s 2025 auctions have seen sidecar co-invest blocks trade at ~100% of NAV—instant access with no new fund lock-up.
Example: In Q2 2025, a wealth management client on iCapital bought a $100,000 stake in a late-stage growth fund (distributed through iCapital in 2018) during a Tangible Markets auction at 98.5% of NAV, joining institutional buyers in a portfolio with no capital calls and robust near-term cash flow expectations.
iCapital Retail Secondaries—2025 Snapshot Table
| Feature | Availability | Typical Terms | Exposure Boost |
|---|---|---|---|
| Minimum investment | $75,000 | Pro rata secondary | Up to 20% |
| Auction frequency | Quarterly/Monthly | Auction-based | |
| Asset types | PE, Credit, Real | Sidecar/Direct | |
| Pricing | 98–102% NAV | Primary-like |
Source: iCapital, Tangible Markets, WealthManagement.com
Actionable Advice for Retail Investors
- Watch auction windows closely: iCapital and its partners typically announce live auctions at the end of each quarter. Quick action + upfront diligence pays off.
- Understand underlying assets: Scrutinize asset-level performance and distribution schedules; highest value is in funds already distributing.
- Engage in “sidecar” deals: These give you co-investment-style risk/reward but with far more transparency than committing to new blind-pool funds.
Distressed Secondary Market Opportunities: Riding the 2025 Default Cascade
Here’s a hard reality: Rising rates, slower economic growth, and overleveraged buyouts set the stage for a wave of distress in private equity portfolios. Moody’s data shows the average US corporate default risk at a post-crisis high of 9.2% in late 2024, with smaller, loan-financed firms particularly at risk as rates remain stubbornly high.
But for the astute, this means opportunity:
- “Vulture” investors in secondaries are identifying and scooping up positions trading at 25–40% discounts, targeting 30%+ IRRs as the distress cycle peaks.
Where to Hunt for Alpha
- Distressed/mezzanine fund stakes: Portfolio sales often push these assets out at deep discounts, particularly where sponsors seek to clean up their books.
- Energy and real asset secondaries: With sectoral dislocation, family offices and specialists are moving fast to buy cash-flowing infrastructure or energy deals at multiples not seen since 2010.
Typical returns: Secondary buyers in LBO and distressed credit are now targeting 16–30% IRRs based on deep discounts and reversion of mean valuations post-restructuring.
Example: In Q2 2025, a European special sits fund acquired tail-end energy assets at 60% of NAV from a corporate pension unloading distressed positions. Within six months, asset monetizations delivered distributions equal to 30% of original cost—showing how crisis can turn into windfall.
Moody’s 2025 Distressed Market at a Glance Table
| Sector | Default Rate | Average Discount | Targeted IRR |
|---|---|---|---|
| Overall US Peers | 9.2% | 25%+ | 20–30% |
| Leveraged loans | 7.6% | 30–40% | 25–35% |
| High-yield bonds | 3.3% | 15–20% | 15–25% |
Source: Moody’s, Setter Capital
Actionable Tips for Distressed Secondary Strategy
- Move early: Default rates tend to peak several months before realized recoveries, so targeting 2025–2026 maturities now is key.
- Insist on transparency: Deep dive into updated cap tables, debt documentation, and GP plans for restructuring before bidding.
- Partner with specialists: Don’t go it alone—work with funds who have proven track records in distressed equity and credit.
- Aim for “special sits” with healthy cash flows: Look for assets where operational turnarounds or post-default recapitalization are already in motion.
Family Office Secondaries Strategies with UBS in 2025: Structuring for Tax and Legacy
The world’s top family offices—managing an average of $1.1 billion per office by UBS’s latest count—are making big moves in the secondaries market, not only for liquidity but also for tax efficiency and generational wealth planning.
Tactical Secondaries for Family Offices
UBS’s 2025 Global Family Office Report reveals:
- Family offices are now allocating up to 54% of assets to alternatives, with secondaries playing a pivotal role.
- Structuring bespoke deals — often rolling into GP-led continuation funds or specially structured SPVs — lets family offices capture “carry” on older investments, roll over tax basis, and smooth income across years.
Tax carry-forward strategies: By rolling gains from a secondary sale into a new structure (e.g., a new continuation fund), family offices may defer capital gains and better manage taxable events across generational wealth plans.
Example: Real-World Strategy
A North American family office in 2025 worked with UBS to roll a $150 million exposure in a healthcare buyout fund out of a legacy LP interest into a bespoke continuation vehicle. By doing so, it not only deferred a large capital gain but also maintained economic upside via a preferred equity structure — leading to an estimated 10% boost in after-tax returns compared to an outright sale.
UBS 2025 Family Office Strategic Allocations Table
| Asset Class | Avg. Allocation | Role of Secondaries |
|---|---|---|
| Developed markets | 56% | Liquidity, risk mitigation |
| Private equity | 21% | Value capture, tax efficiency |
| Private debt | 11% | Enhanced yield |
| Hedge funds | 4% | Diversification |
Source: UBS Global Family Office Report
Practical Tips for Family Offices
- Work with a top-tier structuring advisor (like UBS): Structure deals to defer capital gains, especially when rotating out of legacy positions.
- Explore multi-asset continuation vehicles: These can let you maintain exposure to high-conviction assets while rotating out of others, all in a tax-smart wrapper.
- Think multigenerational: Consider how your secondaries strategy aligns with your family’s long-term succession planning and philanthropic goals.
- Negotiate “rollover” options with GPs: Retain opportunity for future upside on rolled positions instead of cashing entirely out.
Real-Life Stories: Secondaries Deals That Changed the Game
Let’s move from theory to experience. Here are some real-world case studies from 2025:
- Endowment Liquidity at a Discount: Yale and Harvard, facing denominator effect challenges in volatile markets, sold PE fund portfolios in first-quarter 2025 at discounts of 25–30%. Buyers who moved quickly capitalized on immediate cash flows as distributions picked up.
- Retail “Sidecar” Conquest: A midwestern RIA used the iCapital platform to access late-stage growth fund secondaries, delivering reduced J-curve drag for clients and 20%+ realized exposure in under two years.
- Family Office Tax Innovation: A Europe-based family office combined a secondary purchase and bespoke continuation fund to balance realized gains and set up a preferred equity return profile for the next generation, boosting after-tax results significantly.
- Distressed Playbook: A private debt focused special situations team bought distressed energy loans at 35% discounts — then worked with the GP to restructure, leading to a distribution waterfall that exceeded modeled IRR by 12%.
Building Your 2025 Private Equity Secondaries Playbook: Actionable Advice
Let’s distill all this into practical, immediate steps you can take in 2025:
For Buyers:
- Target mature (“J-curve skipped”) funds at NAV discounts, leveraging Setter Capital and Preqin vintage analytics to identify timing windows.
- Insist on detailed portfolio transparency; dig deep to understand underlying company health, distribution prospects, and capital structure.
- Prioritize innovative payment terms: Negotiate deferred or structured payments to lift IRRs and lower upfront risk.
- Go beyond the brand names: Smaller and mid-market buyout and growth funds are often less crowded and offer better value.
For Sellers:
- Sell opportunistically, not reactively. Use Preqin and Setter tools to monitor pricing momentum and pitch to the market at advantageous moments.
- Bundle portfolios strategically: Add “sweeteners” to enhance buyer appetite for tail-end or hard-to-place assets.
- Work with experienced intermediaries: Their process, reach, and negotiation can add several percent to a transaction price.
For Family Offices and UHNW Investors:
- Lean into bespoke structuring: Work with top-tier banks or platforms to roll gains, defer tax, and align liquidity with generational goals.
- Join GP-led deals as direct participants where you can negotiate preferred rights and carry-forward upside.
For Retail and Advisors:
- Use iCapital, Tangible, and similar to access deals previously locked to institutions.
- Stay proactive: Auction participation is often invitation-based and moves quickly—get on the right lists.
- Educate yourself about distribution timelines: Secondaries may pay out much faster than primaries, changing client expectations.
The GroundBanks.com Difference: Story Meets Strategy
Finance isn’t just about the numbers — it’s about the story they tell and the lives they change. At GroundBanks.com, we believe in making the world of private equity secondaries not just accessible, but genuinely empowering. We translate complexity into practical, actionable steps. We highlight real stories from entrepreneurs, endowments, and families who have used this remarkable market to reshape their financial futures.
As I write this, I want you to see yourself in these case studies—whether you’re navigating an institutional portfolio rebalance, seeking more resilient family office returns, or simply wanting your first taste of private equity at a better price, secondaries are your ally.
Conclusion: Your Path Forward — Seize Private Equity Secondaries Today
In 2025, private equity secondaries stand not just as a liquidity solution but as one of the most dynamic, versatile, and high-impact investment levers available. Whether your goal is to skip the J-curve, rebalance a complex portfolio, ride the vulture wave of distressed deals, or craft a tax-smart generational legacy, the strategic opportunity has never been clearer—or more urgent.
So what should you do now? Take action:
- Reach out to GroundBanks.com for a curated consultation on building your own 2025 secondaries strategy.
- Subscribe to our daily insights on the private equity secondaries marketplace—so you never miss your next big opportunity.
- Download our exclusive Secondaries Checklist to spot, evaluate, and capture discounted investments before the crowd.
- Share your story: Have you already made a secondaries investment? Let us know—your experience may inspire others stepping onto this path.
The private equity secondaries market is no longer just for insiders — in 2025, it’s yours to seize. Let’s build your story together.
Ready to capture the value, liquidity, and growth that only private equity secondaries can deliver? Contact GroundBanks.com now and make 2025 a breakthrough in your investment journey.
