Golding’s core argument will be familiar to anyone who has tracked the small-cap buyout thesis: less standardization means fewer competing bidders, wider pricing dispersion, and — for managers with the underwriting muscle to do the work — the potential for outsized returns. The flip side is that the same lack of standardization is where lower-end CVs go wrong.

The framing shift: CVs as toolkit, not workaround

The paper opens by dispatching what it calls an “outdated” view — that continuation vehicles are primarily a release valve for weak exit markets. Citing Preqin’s Private Equity in 2026 survey, Golding notes that 52% of investors now consider the GP-led secondaries strategy attractive and 38% are active as buyers or sellers, with single-asset CVs dominating that activity. KPMG’s estimate that continuation vehicles already represent roughly a fifth of sponsor-led exits is presented as confirmation that the structure has moved from cyclical patch to permanent fixture of the private equity lifecycle.

That framing aligns closely with the editorial position this publication has taken repeatedly: secondaries, including GP-leds, are portfolio management tools rather than distress signals. Golding’s contribution is to push that argument down-market, where — the paper argues — the dynamics are structurally different from the large-cap CVs that dominate headline volume figures.

Seven pitfalls, one underlying theme

The bulk of the paper is organized around a framework of seven recurring failure modes that Golding says it sees across cycles and geographies in the lower end of the market. The through line across all seven is that smaller CVs are more “situation-specific” — fewer standardized data rooms, more concentrated investor groups, and managers whose organizational capacity may not scale with the size of the vehicle relative to their existing fund program.

The governance lens: why rationale drives conflict management

The Linklaters-authored governance sections — credited to Martin Mager and Zornitsa Chorbadzhiyska — make a structural argument that’s worth flagging separately from the investment framework. Their point is that the sponsor’s inherent conflict in a GP-led deal (representing both the selling fund and the buying vehicle) isn’t resolved by documentation alone. Where the transaction rationale is genuinely credible — a defined growth phase, an operational transformation — disclosure tends to be more comprehensive and LPAC engagement “more constructive,” even where investors disagree on price. Where the rationale is weak, the paper argues, governance mechanisms get asked “to do more than they can realistically deliver,” and tensions surface as compressed timelines and selective disclosure.

This is a useful framing for LPs evaluating CV consents: the quality of the process itself can be read as a signal about the quality of the underlying rationale.

Practitioner notes: pricing, leverage, and the “bridge” toolkit

Beyond the seven pitfalls, the paper closes with three market-practice observations framed as neither risks nor opportunities in themselves, but as execution trends specialist investors are increasingly navigating:

Bridging valuation gaps — deferred consideration, earn-outs, and performance-linked instruments are described as most effective when negotiated early through trust-based GP dialogue, rather than bolted on late to win a competitive process.

Pricing convergence with M&A logic — Golding notes that GP-led pricing, historically anchored to discounts off last reported NAV, is increasingly converging with traditional M&A methodologies, including concurrent debt refinancings. W&I insurance use is rising but remains selective at smaller deal sizes, reflecting a cost-versus-risk-transfer trade-off.

Vehicle-level leverage as a value driver — or not — the paper is blunt that incremental structural leverage at the vehicle level “rarely enhances the underlying economics of the asset itself” in the lower-middle market, where value creation is operational rather than financial-engineering-driven.

The takeaway

Golding’s framework doesn’t break new conceptual ground for readers steeped in the GP-led literature — the tension between rationale and structure, the conflicted-sponsor problem, and the case for the small- and mid-market have all been made before by various secondaries platforms. What this paper does is package those arguments specifically around the European sub-€500 million segment, with a governance overlay from Linklaters that goes deeper on process design than most LP-facing secondaries marketing material typically does. For an audience increasingly asked to evaluate CV consent requests on tight timelines, the seven-pitfall checklist functions less as new insight and more as a structured diligence template — which may be exactly the point.

Founded in 2007 by Monte Brem, Thomas Keck, and Jose Fernandez — veterans of Pacific Corporate Group — StepStone began as a conflict-free private markets advisory serving institutional investors seeking bespoke portfolio construction. It listed on Nasdaq in 2020 and has since grown into one of the largest private markets platforms in the world. As of March 31, 2026, the firm was responsible for approximately $885 billion of total capital, including $233 billion in assets under management. Its client base spans the world’s largest public and private pension funds, sovereign wealth funds, insurance companies, endowments, foundations, family offices, and private wealth clients. The firm operates across four core asset classes — private equity, infrastructure, private debt, and real estate — through a combination of separately managed accounts, commingled funds, and, increasingly, semi-liquid evergreen vehicles targeting the private wealth channel. It employs approximately 1,090 people across 31 offices globally.

The Washington-based firm generated nearly $14 billion in capital formation in Q4 alone, capping a full fiscal year of $38 billion in gross AUM additions — its best twelve-month period on record. Fee-related earnings surpassed $100 million for the first time, reaching $105 million at a 40% margin. For investors and managers watching the secondaries space, the numbers carry a clear signal: the market for private equity secondaries — both LP-led and GP-led — remains structurally robust, institutional demand is accelerating, and the largest platforms are expanding capacity accordingly.

A wave of secondaries capital approaching activation

StepStone closed its flagship PE secondaries fund at $2.2 billion in initial commitments and its GP-led PE secondaries fund at $200 million in a first close. Together, these two vehicles account for $2.5 billion of the firm’s record $40 billion in undeployed fee-earning capital — and both are expected to activate within the next two quarters.

That activation matters beyond StepStone’s own income statement. When large secondaries funds of this scale move from fundraising into deployment mode, they become active buyers in the market, shaping pricing, deal flow, and the competitive dynamics for other secondaries managers. The infrastructure secondaries fund also saw approximately $300 million of additional closes, with retroactive fees already recognized this quarter.

On the venture side, StepStone’s SPRING fund — a semi-liquid evergreen vehicle giving individual investors access to late-stage venture secondaries — generated $1.2 billion in subscriptions in Q4, making March and April its two best months ever. CEO Scott Hart confirmed that May was tracking similarly.

The VC secondaries thesis: concentration and the AI tailwind

StepStone’s venture secondaries franchise is arguably the most strategically distinctive part of its secondaries business.

Head of Strategy Michael McCabe outlined a thesis built around the power law dynamics of venture capital: the top 100 venture-backed companies have driven close to 50% of total value creation over the past decade. StepStone’s response is to build deliberately concentrated secondaries portfolios targeting those assets — sourcing through LP-leds, GP-leds, and direct secondaries relationships with management teams and lead investors alike.

The portfolio composition reflects this approach. In the SPRING fund, the top 50 positions represent approximately 75% of total fund value. Of those 50 companies, roughly 75% carry direct AI exposure — spanning AI-native businesses, defense technology, space, cybersecurity, and fintech. For European LPs evaluating whether to allocate to US venture secondaries strategies, this concentration profile is both an opportunity and a risk to assess carefully.

The dedicated VC Secondaries Fund — StepStone’s institutional vehicle, which last raised over $3 billion — is returning to market “shortly,” according to the call. Its return will represent one of the larger VC secondaries fundraises in the market this year.

A fee structure change signals LP pricing power

Buried in the financial details was a disclosure worth noting for anyone tracking how secondaries fund terms are evolving. StepStone announced a prospective change to the fee structure of its flagship PE secondaries fund: lower management fees during the investment period, offset by higher fees after deployment is complete. The firm described this as aligning with “recent market practices” and mitigating the J-curve for LPs.

The isolated impact, according to CFO David Park, would be a three-to-four basis point reduction in the firm-wide blended commingled fund fee rate when the fund is fully raised and activated — expected to be offset by continued growth in higher-fee private wealth products. The present value of total fees is structured to be equivalent to the old terms.

The change is a small but meaningful data point. It suggests that LP pressure on fee structures in PE secondaries has reached the point where even the largest and most established managers are making concessions on investment-period economics. Whether this becomes the new market norm is worth watching across the next vintage of funds from peer managers.

The exit environment: secondaries as pressure valve

StepStone’s $936 million in net accrued carry — up 7% in the quarter — sits largely in mature, harvest-ready programs. Approximately 60% is tied to funds older than five years. Yet gross realized performance fees of $46 million were below recent quarterly paces, reflecting the continued drag from depressed M&A and IPO markets.

Management was candid about what is needed for a recovery: full exits, not just continuation vehicles or partial realizations. Both of those structures — which have become increasingly prevalent as GPs manage liquidity in the absence of traditional exit routes — allow capital to stay locked up even as some value is returned. The industry came into 2026 cautiously optimistic, only to face a fresh set of disruptions: AI uncertainty, concerns around private credit, and geopolitical instability. Full exit volume has not yet returned to historic norms.

In that context, StepStone was explicit that secondaries will continue to serve as a primary liquidity mechanism for both GPs and LPs. The logic is straightforward: as long as the exit environment remains constrained and LPs are focused on distributions, the demand side for secondaries transactions does not abate. The question for secondaries managers in 2026 and beyond is less whether deal flow exists and more whether pricing discipline and portfolio construction can hold through a period of macro volatility.

A European story, not just a US one

StepStone’s results are often read through a US lens — and understandably so, given that its private wealth platform and its venture secondaries franchise are predominantly American in character. But the firm’s European presence is substantial enough that its strategic priorities carry direct implications for the continent’s secondaries market.

StepStone has operated in Europe since 2005, and today runs seven offices across the continent — including London, Dublin, Rome, and Milan, which opened in 2025. Its EU-regulated subsidiary, StepStone Group Europe Alternative Investment Limited (SGEAIL), is authorized by the Central Bank of Ireland and manages €29.1 billion in AUM on behalf of European institutional clients, up from €20.6 billion in December 2022. The Dublin office alone employs 110 people — roughly 10% of the firm’s global workforce — and has doubled its headcount since 2021.

That footprint matters in the context of the secondaries pipeline described on the earnings call. When StepStone activates its flagship PE secondaries fund and its GP-led secondaries vehicle over the coming two quarters, SGEAIL will be among the entities through which European pension funds, insurance companies, and family offices gain exposure to those programs. European LPs are not just passive observers of this fundraising cycle — they are a core part of the capital base being assembled.

The Milan expansion is also a signal worth noting. Italy has become an increasingly active market for private markets distribution, particularly among private banks and family offices, and StepStone’s decision to establish a second Italian office alongside its Rome presence reflects a deliberate effort to deepen local relationships ahead of what the firm clearly expects to be sustained demand growth. Head of Europe David Jeffrey described it as part of a broader strategy of strengthening presence in Europe’s key financial hubs.

For European secondaries managers and LPs, the trajectory is legible: the largest global platforms are building permanent, regulated infrastructure on the continent, not simply parachuting in for fundraising cycles. The competitive and co-investment landscape in European secondaries will increasingly be shaped by firms operating at this scale.

StepStone’s results suggest the largest global platforms are navigating a difficult macro environment with notable confidence — and are actively expanding the European infrastructure to sustain that growth. The secondaries pipeline it is bringing to market — across PE, GP-led, infrastructure, and venture — represents one of the broadest and most capitalized programs globally. For European managers and LPs, the message is clear: the global secondaries market is entering a deployment cycle, and its gravitational pull will be felt on this side of the Atlantic.

Lindbäck is not a secondaries specialist. He is a direct buyout investor who spent three decades doing what the GPs on the other side of continuation vehicle transactions do. That is a deliberately different profile, and it tells you something about where Pantheon thinks the GP-led market is heading.

The Setup

Pantheon’s CIO Jeffrey Miller flagged in the firm’s January 2026 outlook that GP-led deal volumes were up over 30% in 2025, with the pipeline still strong despite record transaction volumes the two years prior. The firm’s read is structural rather than cyclical: GP-led solutions are becoming a permanent feature of how fund managers handle portfolios and liquidity, not a distress tool.

As that market matures, the transactions get more complex. Buying into a continuation vehicle means genuinely underwriting the underlying business, not just negotiating a NAV discount. Someone who has spent 25 years inside rooms where these decisions are made is more useful than another generalist secondaries buyer.

The TMT Angle

A large portion of European TMT buyouts from the 2019 to 2021 vintage are now aging in portfolios. Software businesses, digital transformation plays, technology-enabled services, many of them bought at elevated multiples with cheap debt and limited exit options today. The IPO window has been narrow. Strategic M&A selective. GPs holding these assets are under real pressure, with LP distributions running well below the ten-year average according to Pantheon’s own data.

The GP-led continuation vehicle is the logical answer for managers who believe in the asset but need a liquidity solution. Pantheon, with fresh capital from the 1.1 billion dollar close of its Secondary Opportunities Fund II in 2025, wants to be the buyer. Having Lindbäck in the room to underwrite the underlying TMT business is the edge.

What It Adds Up To

Pantheon’s January report is candid that the secondaries market is becoming more competitive and that generalist LP portfolio capability is being commoditized. The differentiation will come from sector depth, GP relationships, and the credibility to be a preferred partner in complex processes.

As their own January report puts it, in an increasingly competitive market it comes down to finding “a manager that has strong investment acumen, and the depth of relationships that enables them to source and diligence the best deals available.”

Lindbäck is Pantheon putting its money where its mouth is.

Two Continuation Funds, Powerfully Executed

Astorg’s entry into the GP-led secondaries market came from necessity as much as strategy. By 2022, IQ-EQ — a global investor services platform it had backed since 2016 — had become the last remaining asset in its fifth flagship fund, Astorg V. Rather than sell into a tepid exit market or extend the fund beyond its natural life, Astorg structured a €1.3bn continuation vehicle, bringing in AlpInvest Partners and Goldman Sachs Asset Management Vintage Funds as lead anchor investors. The vehicle closed heavily oversubscribed, with commitments from both existing Fund V LPs rolling their positions and new investors entering alongside a meaningful equity contribution from IQ-EQ management.

Two years later, Astorg returned to the continuation vehicle structure for Normec, a pan-European testing, inspection, certification and compliance (TICC) platform that had more than quadrupled in size since its 2020 acquisition, executing over 40 bolt-on deals. The €1.4bn Normec continuation fund — backed by CVC Secondary Partners, Pantheon, Lexington Partners and Eurazeo — was again oversubscribed, with sovereign wealth funds, pension funds and family offices participating alongside rolling Fund VII LPs. The investment thesis was explicit: extend the hold to pursue a US expansion plan that would roughly double the addressable market. By August 2025, Normec had entered the US through three acquisitions.

“Following the €1.3bn continuation fund raised to support IQ-EQ in 2022, establishing our second continuation fund for Normec marks a significant milestone for Astorg.”

François de Mitry, CIO, Astorg, July 2024

Both continuation vehicles demonstrated clear GP-led deal craft: high-quality assets with proven compounders, credible value-creation extensions, well-anchored by institutional secondaries investors and structured with meaningful GP and management co-investment. On paper, Astorg had built two pieces of exemplary GP-led dealmaking.

The Pivot to Buyer — and Its Unravelling

It was against this backdrop that Astorg, in late 2023, disclosed plans to launch GP Equity Solutions: a dedicated continuation fund strategy that would position the firm as a buyer of GP-led transactions, rather than solely a seller. The product was co-led by Sebastiaan Van Den Berg and Michal Lange, with a thesis focused on investing in high-quality global B2B companies held in continuation structures — precisely the type of assets Astorg knew intimately from its own deal history.

The logic was coherent in theory: who better to underwrite GP-led transactions than a firm that had just run two of them? But the market and LP community answered that question differently. By December 2024, Astorg had paused the blind pool fundraise for GP Equity Solutions, pivoting to focus on deploying capital already secured rather than raising more. Two months later, in February 2025, the firm disbanded the GP-led effort entirely. According to the Financial Times, which first reported the broader picture of Astorg’s strategic difficulties, the firm had been unable to raise sufficient capital for the effort and had to let go of the team it had hired to run it — a striking outcome in one of the secondaries market’s most favourable fundraising environments in years.

What the IQ-EQ Sale Now Hangs Over

The irony is that Astorg’s secondaries difficulties now shadow its primary business in a more consequential way. IQ-EQ — the asset at the centre of its first and most celebrated continuation vehicle — remains unsold as of mid-2026. The Financial Times reported that Astorg had been hoping to exit IQ-EQ last year at up to €9bn; that target proved unreachable. As of January 2026, Astorg had formally kicked off a sale process with lenders preparing roughly €2bn in leveraged loan financing for prospective buyers. Blackstone, Permira, Carlyle, EQT and TPG had all circled the asset at various stages. The current valuation expectation has settled around the €5bn mark — a meaningful reset from earlier ambitions.

This matters directly for Astorg’s LP relationships. The FT reported that the firm has been unable to reach first close on its ninth flagship fund — targeting at least €4bn — since launching it in November 2025, with few existing investors willing to re-up. According to the same reporting, the 2019 and 2016 flagship funds were valued at 1.5x and 1.7x net MOIC respectively as of late 2024 — below the 2x threshold the buyout market typically considers strong. The FT also reported that Astorg had appointed Goldman Sachs to explore a sale of the firm itself, though no transaction materialised; newer partners subsequently bought equity from co-founders Thierry Timsit and Xavier Moreno in a restructuring designed to preserve the firm’s independence.

“Fundraising for our latest flagship, launched in November 2025, is progressing in what remains a selective and competitive market environment.”

Astorg — Statement to the Financial Times, May 2026

The Structural Lesson for Secondaries

Astorg’s arc offers a precise illustration of a recurring tension in the GP-led market: the skills required to be a compelling seller of continuation assets — deal structuring, asset selection, LP alignment, GP-co-investment credibility — do not automatically transfer to the buy side of that market. Secondaries LPs are asked to make a fundamentally different underwriting decision than buyout LPs. They are not backing a GP’s forward deal pipeline; they are backing that GP’s judgment about the residual value of existing assets, often at a premium to NAV. The question “do I trust this GP to pick assets worth continuing to hold?” is distinct from, and in some ways harder to answer than, “do I trust this GP to do new deals?”

Astorg’s GP Equity Solutions faced the additional burden of being a new entrant in a secondaries market already crowded with multi-decadespecialists — Lexington Partners, Pantheon, AlpInvest, Ardian, HarbourVest — who have built allocation relationships, dedicated teams, and LP bases entirely separate from their PE primary businesses. For LPs evaluating a new secondaries fund manager, the presence of a large, established buyout operation on the same platform can raise as many questions as it answers: alignment of interest, capital allocation priority, team retention incentives, and whether the secondaries unit would receive preferential access to Astorg’s own continuation vehicles — a structural conflict that is difficult to resolve cleanly.

The Normec and IQ-EQ continuation funds, in contrast, were unambiguous successes as deal structures: high-quality assets, credible continuation theses, oversubscribed closes backed by the strongest names in secondaries. If IQ-EQ clears at or near €5bn in its current process, the continuation fund LPs will have done well. Normec’s US expansion is live and accelerating. The GP-led track record, taken on its own terms, is strong.

What Astorg discovered is that executing good GP-led deals and running a credible GP-led secondaries fund are related but distinct businesses. The market — specifically the LP community that funds secondaries strategies — draws a hard line between the two.

SOURCES

Reporting draws on Astorg company announcements; Secondaries Investor (Secondaries Investor / PEI Media); Bloomberg News; Reuters; Private Equity Wire; ION Analytics / Mergermarket; and reporting by the Financial Times (”Astorg’s flagship fundraise struggles as private equity braces for shakeout,” May 2026, by Alexandra Heal), which first reported the firm’s flagship fundraising difficulties, the GP Equity Solutions team departure, fund-level MOIC figures, the Goldman Sachs mandate, and the ownership restructuring. MOIC figures and the IQ-EQ exit price aspiration cited in this article are sourced solely from FT reporting and have not been independently verified by Secondary Scoop.

It is Lexington Partners — and the booming global market for secondary private equity that surrounds it.

Franklin Templeton’s Q2 2026 earnings call, held on April 28, painted the picture of an asset manager that is firing on all cylinders. But look closely at the numbers and the narrative, and one theme keeps surfacing: the secondaries business is becoming the firm’s most powerful long-term growth driver, and the best may still be ahead.

A Fundraising Machine in Full Swing

Start with the headline numbers. Franklin Templeton raised $13.2 billion in private market assets during the quarter alone, diversified across alternative credit, secondary private equity, real estate, and venture strategies. Fiscal year-to-date private markets fundraising has already reached $22.7 billion — matching the entire fiscal year 2025 total with two quarters still to go.

The firm entered fiscal 2026 with an annual fundraising target of $25-30 billion, already an upward revision from the prior year’s goal. By the second quarter, CEO Jenny Johnson was signaling they expect to come in above $30 billion for the full year. That would represent a new record for the platform.

Secondaries is at the center of that story.

Lexington: On Track for a Generational Raise

Lexington Partners, the secondaries giant Franklin Templeton acquired in 2022, is currently in the market with its next flagship fund. Management declined to disclose specific figures ahead of an expected regulatory filing later in the fiscal year, but the signals from the earnings call were unambiguous.

Lexington contributed “meaningfully” to the quarter’s fundraising. It is “right on track.” Demand for the strategy is strong. And when an analyst asked point-blank whether there was any reason the new flagship could not match or exceed the size of its predecessor — Lexington X, which closed at $22 billion — Johnson did not hesitate: there is no reason to think otherwise.

For context, a fund that matches or beats that figure would make it one of the largest secondaries vehicles ever raised. The secondaries market has been on a structural growth trajectory for years, but the current environment — marked by a massive overhang of unrealized private equity value, LP pressure for liquidity, and a slowdown in traditional exit activity — has created what many practitioners describe as a golden moment for secondary buyers.

Franklin Templeton is not just observing that trend. Through Lexington, it is one of the primary beneficiaries of it.

Lexington Partners' Secondaries Business: Key Figures

Why Secondaries? The Macro Case Has Never Been Stronger

Johnson articulated the investment thesis clearly during the call. Investors are increasingly focused on three things: liquidity solutions, portfolio rebalancing, and access to high-quality assets at more attractive entry points. That is a near-perfect description of what the secondaries market offers.

After years of record primary fundraising and limited distributions from private equity managers, LPs across the globe are sitting on large, illiquid portfolios and facing mounting pressure to generate cash for new commitments, rebalance their allocations, or simply right-size their private equity exposure. The secondary market is the mechanism through which that happens — and Lexington, with data on 55,000 private companies and decades of underwriting expertise, is positioned as a premier buyer in that process.

The firm’s secondaries strategy is not just about capturing discounts at entry. As Johnson explained on the call, the initial discount at close has historically represented between 20% and 25% of total return over the life of a secondaries fund. The majority of value creation still comes from the underlying assets — which means selectivity and underwriting quality matter enormously. Lexington’s edge, in management’s view, is the depth of its information advantage and its ability to be selective in a market where not all sellers are equal.

The Evergreen Bridge to Wealth Management

Beyond the institutional flagship, Franklin Templeton is building a parallel secondaries distribution channel through its evergreen product suite — and the traction is notable.

The Lexington-managed evergreen vehicle, designed for the wealth management channel and offered alongside similar structures from Benefit Street Partners (private credit) and Clarion Partners (real estate), is part of a combined platform that has reached $8 billion in AUM across the three strategies. Together, these vehicles are raising approximately $200 million per month — a pace that has remained consistent in recent quarters with no signs of slowing.

This matters for two reasons. First, it represents a structural expansion of the secondaries investor base beyond institutional LPs into the wealth channel — a democratization trend that is still in its early innings across the industry. Second, it provides Franklin Templeton with a recurring, diversified fundraising stream that complements the lumpy, flagship-driven cycle of traditional closed-end funds.

Critically, management noted they have seen zero pressure from redemptions across the evergreen suite. In a market where some managers have faced redemption queues on similar products, that is a meaningful data point.

The Markup Controversy: Lexington’s Clean Record

No conversation about the secondaries market in 2026 can avoid the regulatory and reputational scrutiny that has emerged around valuation practices — specifically, the practice of marking up assets immediately upon close based on the implied discount to NAV.

An analyst raised the question directly during the call. Johnson’s response was measured and instructive. She acknowledged that a specific competitor’s decision to change its valuation policy — and the lack of clarity around how that change was communicated — generated significant market noise. But she was clear that this was not a Lexington issue.

The framing she offered is worth understanding: in a well-run secondaries fund, the discount negotiated at entry is just one component of returns, and not the dominant one. Over the life of a fund, asset appreciation in the underlying portfolio drives the majority of value. A manager that tries to front-load returns through aggressive mark-ups at close is, in effect, borrowing from future performance — and sophisticated LPs know it.

For Lexington, management’s position is that their valuation approach has been consistent and transparent, and the current regulatory attention on competitors does not change their underwriting or reporting framework. On the question of whether the scrutiny is dampening LP demand for the asset class broadly, Johnson was dismissive: the structural drivers of secondaries demand are independent of short-term valuation controversies.

The Numbers Behind the Narrative

The secondaries momentum is showing up clearly in Franklin Templeton’s financial results. Overall alternatives AUM hit a record $282.8 billion in Q2 2026. The alternatives segment generated $12.4 billion in net inflows for the quarter — the largest contributor to the firm’s total $16.9 billion in long-term net inflows.

Adjusted operating income reached $474.6 million, up 8.5% from Q1 and 25.8% year-over-year. Adjusted operating margin expanded to 27.1%, up from 25.0% the prior quarter and 23.4% a year ago. Management is guiding toward margins in the high 29s by Q4 fiscal 2026, with a path to 30%+ in 2027 — ahead of their own plan.

The institutional pipeline of won but unfunded mandates remained strong at $20.2 billion, consistent with the prior quarter, suggesting the fundraising momentum visible in current results has a runway behind it.

What the Rest of 2026 Looks Like

The second half of Franklin Templeton’s fiscal year 2026 sets up as a potential landmark period for the secondaries business. Lexington’s flagship fund filing is expected sometime in the second half — likely the fiscal fourth quarter ending September 2026 — and will give the market its first formal look at the fundraise’s size and progress.

In the meantime, the evergreen channel continues to compound. The institutional pipeline continues to refill. And the macro environment for secondaries — elevated dry powder, limited distributions, LP liquidity needs, and a growing appetite among non-U.S. investors for the asset class — shows no signs of reversing. Management noted that 40% of alternatives fundraising now comes from outside the United States, with APAC at 23% and EMEA at 16%, and that demand for secondaries specifically is part of that international growth story.

Franklin Templeton entered the secondaries market in a meaningful way with the Lexington acquisition in 2022. Three years later, that bet is paying off in ways that are showing up not just in AUM and flow figures, but in the firm’s margin expansion, its competitive positioning in the wealth channel, and its ability to tell a coherent growth story to investors and analysts alike.

The question heading into the back half of 2026 is not whether secondaries will be a record year for Franklin Templeton. Based on what the numbers are showing, it already is. The question is by how much.

This article was written based on Franklin Templeton’s Q2 2026 earnings call transcript and investor presentation dated April 28, 2026. All figures are non-GAAP unless otherwise noted.

That is not a line from a fundraising deck. It is what Connor Teskey, CEO of Brookfield Asset Management, said during the firm’s Q1 2026 earnings call. His reasoning is straightforward: AI adoption, digitalization, rising energy demand, and deglobalization are all creating sustained, simultaneous demand for capital. Data centers, power generation, transmission networks, fiber, cooling systems — the physical backbone of the modern economy needs to be built, and it needs to be built now.

The numbers back him up. According to McKinsey’s Global Private Markets Report 2026, global infrastructure fundraising hit a record of nearly $200 billion in 2025, up 58% over 2024. In Europe alone, €491 billion has been raised across 679 funds since 2017, according to PitchBook. LP appetite is not slowing: 51% of LPs surveyed by McKinsey plan to increase infrastructure allocations over the next three years, more than any other asset class, ahead of buyout at 35% and real estate at 30%.

The primary market story is well documented. What is less discussed is what all that vintage capital means for the secondary market over the next five years.

The mismatch

Infrastructure funds run on a 10-year clock. The assets inside them do not.

Toll roads, energy grids, renewables, fiber networks, data centers — these are projects where large upfront capital takes 20 to 30 years to fully recover. Much of the value creation happens well after year ten. As Faraz Qureshi, head of infrastructure secondaries at BNP Paribas Asset Management, told PitchBook in May 2026: these assets have 10 to 15 more years of value creation ahead of them once a typical fund reaches maturity.

The funds raised in the 2017 to 2020 boom are hitting that wall now. And unlike software or buyout assets, you cannot simply sell a half-built renewable energy platform or a data center three years into a 20-year development cycle at a price that makes sense. Traditional exit routes are not designed for this.

Why continuation vehicles make sense here

A GP-led continuation vehicle lets a manager move assets from a maturing fund into a new structure. Existing LPs can cash out or roll their exposure. New capital comes in to support the asset through the rest of its development cycle.

The market is already reflecting that logic. According to PitchBook, infrastructure secondary deal volume hit $25 billion in 2025, more than double the $11 billion transacted in 2023. GP-led deals reached a record $14.6 billion in 2025, with EMEA accounting for roughly 30% of flow, according to Campbell Lutyens in its Q4 2025 Infrastructure Market Report. Dedicated infrastructure secondaries fundraising more than doubled to $11.5 billion globally last year. PJT Partners, in its FY 2025 Secondary Market Insight, projects the market will reach $45 billion by 2030.

Worth noting: the motivation behind GP-leds is also shifting. According to Qureshi, portfolio rebalancing is largely done. What is driving continuation vehicles now is portfolio growth.

The demand side

Pressure is building from both directions.

GPs with maturing funds need structures that fit assets with long development cycles. On the buy side, appetite is growing for different reasons. As Qureshi told PitchBook, investors still ramping up their infrastructure portfolios are turning to secondaries to deploy capital, access distributions, and build diversified exposure that is simply not available on day one in the primary market.

With primary fundraising at record levels and LP appetite still growing, the pipeline of funds that will eventually need secondary solutions is only expanding. The 2017 to 2020 vintage wave is the first chapter. Funds raised in 2021, 2022, and 2023 have not arrived yet.

What to watch in 2026

That gap between asset life and fund life is not going away. If anything, as infrastructure mandates expand into more complex, capital-intensive verticals, it is getting wider.

$25 billion in infrastructure secondaries in 2025 looks less like a ceiling and more like a starting point. 2026 is shaping up to be a significant year for GP-leds, with strong appetite from both GPs needing liquidity solutions and LPs looking to build infrastructure exposure through the secondary market. And the funds from the next wave of vintages have not even arrived yet.

What Is Houlihan Lokey?

For readers encountering the firm for the first time: Houlihan Lokey (NYSE: HLI) is a pure advisory investment bank founded in Los Angeles in 1972. Like Moelis, it has no balance sheet deployed in transactions, no proprietary funds, and no AUM. It earns fees exclusively from advice.

The firm went public in 2015 and has grown into one of the most recognizable independent advisory platforms in the world. As of March 31, 2026, it employs 2,776 people across 33 offices worldwide, has 354 Managing Directors, and generated $2.6 billion in revenue for the fiscal year ending that date — growing at an 11% five-year CAGR. In nine of the ten years since its IPO, it has delivered annual revenue growth.

Its three business segments are Corporate Finance (67% of revenue), Financial Restructuring (20%), and Financial and Valuation Advisory (13%). Within Corporate Finance, the two product lines are Mergers & Acquisitions and Capital Solutions — the latter being where the secondaries business lives.

Houlihan Lokey is also the most acquisition-active boutique bank in this peer group, having completed 20 acquisitions over the last 15 years, including Audere Partners (France, February 2026), Mellum Capital (European real estate, January 2026), and Waller Helms Advisors (insurance and wealth management, December 2024).

The Record Year in Numbers

Fiscal year 2026 — April 2025 through March 2026 — was a record by nearly every measure:

• Total revenues: $2.618 billion, up 10% year-over-year

• Adjusted EPS: $7.56, up 20%

• Adjusted pre-tax margin: 25.9%, flat versus FY2025 but among the highest in the peer group

• Adjusted net income: $518 million, up from $434 million the prior year

• Managing Directors: 354, up from 339 in FY2025, growing at an 8% CAGR over 20 years

• Revenue per MD: $7.6 million, up from $7.3 million

Corporate Finance — the segment that contains Capital Solutions and therefore secondaries — grew 14% for the year to $1.745 billion, with a 17% five-year revenue CAGR. That makes it by far the fastest-growing segment, outpacing Financial Restructuring (0% five-year CAGR) and Financial and Valuation Advisory (13% five-year CAGR).

The Q4, ending March 31, 2026, was more complicated: revenues of $635.6 million were down 5% year-over-year, reflecting two large restructuring transactions that slipped past quarter-end, geopolitical disruption from the Middle East conflict, and software-sector volatility hitting CF deal timing. CEO Scott Adelson was clear-eyed about it — but equally clear that the pipeline heading into fiscal 2027 is at record levels.

Capital Solutions: The Hard Numbers

The Capital Solutions Group comprises 200 dedicated professionals across 18 offices in eight countries as of March 31, 2026. In FY26 - it has raised $36 billion in capital and closed more than 140 transactions. The group explicitly describes itself as one of the largest capital solutions groups at non-balance-sheet banks.

The secondaries piece sits within a sub-group called Secondary Solutions, which covers continuation vehicles, fund tender processes with stapled capital, and sale of LP interests and strip sales. Surrounding it are related capabilities that are highly relevant to secondaries activity: GP Advisory (strategic advisory for asset managers, firm-level equity stake sales, fund-level NAV loans and preferred equity), Directs & Co-Investments (LP-style capital for single-asset transactions, mid-life co-investments), and Primary Capital Advisory (placement for control buyout, growth equity, and alternatives strategies).

The investor presentation also formally lists “Continuation Vehicles and Other Secondaries” as one of the three connecting bridges between its M&A, Capital Solutions, and Financial Restructuring platforms — confirming that HL sees GP-led secondaries as a product that sits at the intersection of all three of its core business lines. That integration is the key differentiator.

On the revenue size question: during the earnings call, CFO Lindsey Alley confirmed that Capital Solutions is 20% of Corporate Finance revenues and that percentage has been growing over the last couple of years. With Corporate Finance at $1.745 billion for the year, that implies Capital Solutions contributed at least $349 million in FY2026 — a nine-figure business growing faster than the M&A segment it sits alongside.

The Pent-Up Demand Chart That Explains Everything

The investor presentation contains a PitchBook chart that Adelson explicitly referenced on the earnings call — and it is arguably the single most important visual for understanding the secondaries opportunity at Houlihan Lokey right now.

The chart shows the inventory of U.S. private-equity-backed companies from 2016 to 2026. The total has grown from 7,821 in 2016 to 13,325 in 2026 — a 70% increase in a decade. More importantly, of those 13,325 companies, 6,790 are now more than five years old. That is over half the entire inventory past a typical hold period, sitting in portfolios waiting for an exit path that traditional channels — IPOs and strategic M&A — have not reliably provided since 2022.

Adelson summarized it directly on the call: there is a lot of pent-up demand. “Over half of them are over five years old. To answer your question with an exclamation point, there is a lot of pent-up demand.” That aging inventory is the structural engine behind the GP-led secondaries market, and Houlihan Lokey, as the most active advisor to private equity globally (286 PE transactions in 2025, per The Deal), is positioned directly in the middle of it.

The firm has 30 senior officers dedicated to the financial sponsor community in North America, Europe, and Japan, covering 1,900 financial sponsor firms across private equity, credit, family offices, and institutional investors. That network is the distribution engine for Capital Solutions mandates — every M&A engagement is a potential introduction to a GP who will eventually need a continuation vehicle.

GP-Led Secondaries and the Restructuring Overlap

One of the most interesting strategic angles from the earnings call is how explicitly Houlihan Lokey’s leadership described the connection between restructuring tailwinds and secondaries opportunity.

Adelson flagged four converging factors driving an improved restructuring outlook for fiscal 2027: widening credit spreads, dislocation in private credit, software sector stress, and energy volatility. He described “several notable recent wins” and used the phrase “elevated levels” — the same language the firm has deployed for three consecutive years of strong restructuring performance.

For secondaries readers, this matters because GP-led secondaries and restructuring increasingly serve adjacent constituencies. A PE firm managing an overleveraged portfolio company in private credit or a repriced software asset may simultaneously need a restructuring advisor for the capital stack and a secondaries advisor to give existing LPs liquidity while bringing in new capital. Houlihan Lokey, with 59 restructuring MDs and one of the largest Capital Solutions teams in the market, is one of the very few advisory firms that can handle both sides of that situation in-house.

The investor presentation formalizes this: “Liability Management” is one of the connecting bridges in the firm’s service diagram between Financial Restructuring and Capital Solutions. GP-led secondaries that involve distressed or out-of-favor assets are precisely the transactions where that integration creates genuine competitive advantage.

The European Buildout

The investor presentation maps Houlihan Lokey’s Capital Solutions team across 18 offices, including London, Paris, and Zurich — the last of which was added with the September 2025 hire of Sandro Galfetti, formerly Head of EMEA Secondary Advisory at UBS Investment Bank. He joined Michael Pilson, who relocated to London, to co-lead GP-led secondary advisory in Europe.

The European expansion matters for three reasons. First, the European GP-led market is at an earlier adoption stage than the U.S. and growing faster. Second, Houlihan Lokey’s acquisition of Audere Partners in France gives the Capital Solutions team direct access to a market where GP-led transactions have historically been underserved by dedicated advisors. Third, EMEA already represents 26% of HL’s total revenue — the largest international region — and CF revenues outside the U.S. grew significantly faster than domestic revenues in both Q4 and the full fiscal year. The infrastructure is there; the Capital Solutions team is now being layered on top of it.

HL’s own research supports the timing. Its LP Compass survey, published in March 2026, found that 86% of active secondary buyers expect 2026 volumes to exceed last year’s record of $225 billion, with European deal flow cited as a meaningful growth contributor. The survey also found that 85% of investors say GP-led deal quality has held firm or improved despite rapid market expansion — an important signal that the market is maturing, not degrading.

The Valuation Advisory Second Derivative

A question on the earnings call surfaced a secondaries angle that is easy to overlook: the connection between Houlihan Lokey’s Financial and Valuation Advisory business and the growing demand for independent marks on private credit and PE portfolios.

Adelson’s response was enthusiastic. The portfolio valuation group, he said, has been growing through all cycles, private credit dislocation is driving more frequent and more rigorous marking, and if private equity exits open up broadly, the Total Addressable Market for valuation services could double.

The investor presentation confirms the scale of this business: 2,500+ annual valuation engagements, the #1 global M&A fairness opinion advisor for 25 consecutive years, and the Best Valuations Firm for Hard to Value Assets globally for seven straight years. As secondary transaction volumes grow — and as buyers and sellers of GP-led and LP-led positions increasingly require independent valuation support — HL’s FVA segment becomes a natural adjacency to the Capital Solutions team. The same firm that advises on the continuation vehicle can provide the independent mark on the underlying assets. That is a meaningful cross-sell and a genuine service differentiation.

What to Watch in Fiscal 2027

Three things to track for Secondary Scoop coverage:

Capital Solutions’ revenue trajectory. With Corporate Finance growing at a 17% five-year CAGR and Capital Solutions above 20% of that — and growing — the absolute revenue figure is likely approaching $400 million or beyond in FY2027 if momentum holds. Watch for any decision by management to break out Capital Solutions as a separately disclosed segment. The business is large enough to warrant it.

The European GP-led pipeline. The Galfetti hire in Zurich, the Audere acquisition in France, and the relocation of Michael Pilson to London all point to a deliberate push to build deal flow in EMEA continuation vehicles. The first marquee European GP-led closes from this team would be a significant signal.

Private credit secondaries. Adelson’s comments on private credit dislocation, combined with the valuation advisory tailwind and the firm’s explicit GP Advisory capabilities (NAV loans, preferred equity, fund-level debt), suggest HL will increasingly be in the room when credit-focused GPs need liquidity solutions. That market is early but directionally important.

Houlihan Lokey enters fiscal 2027 as the #1 global M&A advisor by transaction count, the #1 global restructuring advisor for 11 consecutive years, and — based on the data now available — the operator of what may be the largest secondaries advisory team among non-balance-sheet banks. The record backlog, the aging PE portfolio inventory, the European buildout, and the restructuring tailwinds all point in the same direction.

For GP-led secondaries, the setup has rarely looked better. And Houlihan Lokey is squarely in the middle of it.

What Is Moelis?

Moelis & Company (NYSE: MC) is a pure advisory investment bank. It has no AUM, no balance sheet deployed in transactions, no proprietary funds, and no debt. It earns fees exclusively from advice. Founded in 2007 by Ken Moelis — a veteran of UBS and the late Drexel Burnham Lambert — the firm went public in 2014 and has since grown into one of the most respected independent advisory boutiques globally, with 1,440 employees across 23 offices in 45+ countries and 179 Managing Directors as of March 2026.

That capital-light, conflict-free model is not incidental to its secondaries ambitions — it’s the whole point. When a GP selects an advisor for a continuation vehicle, they need someone who can credibly represent their interests to LP voters and secondary buyers without any competing agenda. Moelis has no fund on the buy side. No balance sheet taking a position. No asset management arm with its own carry dynamics. Just advice.

Its four business lines are:

• M&A and Strategic Advisory — its largest product, covering sell-side, buy-side, divestitures, carve-outs, special committee advisory, and fairness opinions. Over $2.6 trillion in transaction volume and 1,500+ deals since IPO.

• Capital Structure Advisory (CSA) — restructuring, liability management, debt exchanges, and balance sheet optimization. Ranked top 3 globally for completed restructurings between 2021–2025, with roughly $1 trillion in liabilities restructured since IPO.

• Capital Markets — equity and debt capital raising, IPOs, PIPEs, convertibles, private placements, and direct lending advisory. Approximately $230bn raised for clients since IPO.

• Private Capital Advisory (PCA) — the newest and fastest-growing unit, covering GP-led secondaries, LP liquidity solutions, tailored capital raise (co-investments, NAV loans, preferred equity), and primary fund placement.

In Q1 2026, the firm posted total revenues of $319.8 million — a record for any first quarter in its history. The business mix was approximately two-thirds M&A and one-third non-M&A, with that non-M&A third shared between CSA, Capital Markets, and PCA. Moelis does not break out revenue by product line, so the exact contribution of PCA — let alone secondaries specifically — is not publicly disclosed. What is clear is that secondaries represents a growing fraction of that non-M&A third, and management’s commentary suggests it’s punching above its weight in terms of strategic priority and pipeline momentum.

Last Twelve Months revenue through Q1 2026 stands at $1.53 billion, and the firm has returned approximately $3.2 billion to shareholders since its IPO through dividends and buybacks — all of it generated from fees, with no balance sheet risk.

Q1 2026: Private Capital Advisory as a Growth Driver

Moelis posted record Q1 2026 revenues of $319.8 million, up 4% year-over-year — and if you read between the lines of the earnings call and the investor presentation published alongside the results, the secondaries business had a lot to do with it.

CFO Christopher Callesano attributed the revenue increase to higher M&A and Private Capital Advisory revenue, partially offset by declines in capital structure advisory and capital markets. In a quarter where two of four product lines declined, PCA pulling in the same direction as M&A is a meaningful signal about where the firm’s growth is coming from.

GP-Leds at the Center

CEO Navid Mahmoodzadegan was explicit on the earnings call: the GP-led secondaries market is hitting record levels, driven by demand for liquidity solutions, the growing adoption of continuation vehicles, and an expanding base of institutional investors seeking exposure to seasoned assets. He said Moelis’s PCA “thesis is playing out as expected,” with live mandates and a rapidly building pipeline.

That thesis has been years in the making. The investor presentation shows the PCA team now maintains over 1,500 global LP relationships and has advised on more than $75 billion in private capital — a figure that includes experience at prior firms but reflects the caliber and network of the senior team. Average experience per Managing Director in PCA exceeds 20 years.

The recent deal track record in secondaries skews heavily toward GP-led structures, specifically continuation vehicles:

Every one of these is a GP-led, and several are single-asset or concentrated structures — the most complex and highest-fee end of the secondaries spectrum. Notably absent from the list: LP-led portfolio sales. Moelis is not positioning itself as a portfolio brokerage shop. Its secondaries identity is firmly in the GP-led, structurally complex, advisor-as-fiduciary lane.

How Big Is the Secondaries Business at Moelis?

The honest answer: we don’t know precisely, and Moelis doesn’t tell us.

The firm reports a single consolidated revenue line with no product-level breakdown. In Q1 2026, total non-M&A revenue was approximately $106 million (one-third of $319.8mm). That bucket is shared by Capital Structure Advisory, Capital Markets, and PCA. Within PCA, secondaries competes for revenue with primary fundraising and tailored capital solutions like co-investments and NAV loans. So secondaries is a fraction of a third — real and growing, but not yet a standalone reportable segment.

What we can infer from the hiring data is instructive. Mahmoodzadegan confirmed on the earnings call that Moelis is building toward seven senior bankers dedicated specifically to GP-led secondaries — with a recent MD hire focused on private credit secondaries and another expected to join later in 2026. For context, the investor presentation shows that PCA led all product categories in recent MD additions: six new managing directors between 2023 and year-to-date 2026, ahead of M&A (six), Capital Markets (five), and Capital Structure Advisory (four).

Building Into Private Credit Secondaries

The expansion into private credit secondaries deserves its own paragraph. Moelis’s PCA platform already covers GP-led equity continuation vehicles across buyout, growth equity, and real assets strategies. Adding a dedicated MD for credit secondaries signals that the firm sees the next wave of secondary activity moving beyond PE portfolio management and into credit portfolios — direct lending books, CLO equity, private credit fund stakes — a market that remains earlier-stage but is attracting serious capital from buyers globally.

The timing makes sense. As direct lenders face increasing pressure from portfolio concentration, vintage clustering, and the AI-driven repricing of software credit (a theme Mahmoodzadegan discussed at length on the call), the secondaries market for credit assets is likely to deepen. Having a dedicated banker in place before that wave fully arrives is a classic Moelis move — patient, talent-forward, organic.

The Macro Backdrop Is Working in Their Favor

The conditions Mahmoodzadegan described on the earnings call are essentially a structural tailwind for GP-led secondaries advisory. Sponsors are sitting on a large backlog of investments that need to be monetized, but the traditional exit channels — IPOs and strategic M&A — remain partially constrained by macro uncertainty, public equity volatility, and geopolitical friction. When the exit window is partially closed, continuation vehicles become the liquidity mechanism of choice for GPs who believe in their assets but need to give LPs an off-ramp.

Mahmoodzadegan also flagged that disruptions in private credit and AI-driven sector dislocation are creating near-term headwinds in parts of the market — while simultaneously noting that these forces “create new opportunities.” For secondaries advisors, that’s not spin. Dislocated GPs managing overlevered software portfolios, navigating lender selectivity, or simply trying to buy time for value creation need creative liquidity solutions, and Moelis is positioning itself as the firm that can structure them — especially when the same transaction might involve elements of capital structure advisory, a NAV facility, and a GP-led secondary all at once.

Why Independent Advisory Wins in GP-Led Secondaries

There’s a structural reason why a pure-play advisory firm is well-positioned to win in GP-led secondaries, and it comes back to Moelis’s fundamental business model.

Unlike bulge-bracket banks that might have asset management arms or proprietary funds competing for the same assets, and unlike secondary funds that are on the buy side, Moelis sits exclusively on the advisory side. Its PCA offering spans Secondary Market Advisory (continuation funds, LP liquidity, equity recaps, NAV loans and preferred equity), Tailored Capital Raise (co-investments, managed accounts, seeded fundraises, stapled primaries), and Primary Fundraise placement. The breadth of that platform means Moelis can advise a GP across the full capital lifecycle — not just when they need a continuation fund, but when they’re raising their next primary too. That continuity of relationship is where advisory firms build durable competitive moats.

The firm ended Q1 2026 with $354 million in cash, no debt, and a strong balance sheet. It returned approximately $171 million to shareholders in the quarter — $0.65 per share in regular dividend plus open-market buybacks. That capital discipline, combined with 400%+ total shareholder return since IPO, suggests the firm has the financial stability to continue investing patiently in PCA without needing the business to immediately carry its own weight.

What to Watch

The pipeline is near all-time highs across the firm, according to Mahmoodzadegan. If a meaningful portion of that pipeline reflects GP-led secondary mandates — and the hiring trajectory suggests it does — then Q2 and Q3 2026 could be the quarters where Moelis’s PCA bet starts showing up more visibly in the revenue line.

The private credit secondaries buildout is the longer-dated but potentially larger opportunity to track. And the question of whether Moelis will eventually break out PCA as a disclosed revenue segment — giving the market a clearer view of the business — is worth watching as the unit scales.

For those tracking the secondaries advisory landscape, Moelis is no longer a peripheral player experimenting with the product. With seven dedicated senior bankers in GP-led secondaries, a string of marquee continuation vehicle closes, an expansion into private credit secondaries, a $75bn+ advisory track record in PCA, and explicit CEO commentary that the thesis is playing out — Moelis has made its position clear.

The question now is execution at scale. And the ingredients — talent, relationships, platform, and conflict-free positioning — are all in place.

Secondary Scoop covers the global market for private equity, venture capital, and private credit secondaries, including GP-led transactions, LP portfolio sales, and fund restructurings.

Let’s put a number on it: GP-led transaction volume in private credit secondaries grew nearly 300% year-over-year in 2025. Not 30%. Not 50%. Three hundred percent.

That figure, from Evercore’s annual secondaries market report, is the kind of stat that makes you stop and ask whether you’re reading it correctly. You are. And it reflects something deeper than a hot market — it reflects a structural shift in how credit managers think about portfolio construction, capital recycling, and liquidity.

How we got here:

The private credit market grew explosively between 2018 and 2024. Direct lending AUM roughly tripled. The number of BDCs, separately managed accounts, and closed-end credit vehicles multiplied. As those portfolios matured, a natural secondary market began to form — GPs looking to clean up older vintages, recycle capital into higher-yielding opportunities, and provide liquidity to LPs without waiting for natural loan payoffs.

What accelerated the GP-led side specifically was the same dynamic reshaping PE secondaries: continuation vehicles. In credit, that looks slightly different. Instead of moving a prized software company into a new vehicle, a credit GP might create a continuation fund around a portfolio of performing direct loans managed by a blue-chip sponsor. The economics are attractive for buyers — seasoned cash-flowing assets, predictable returns, and insulation from interest rate volatility.

Some of the landmark deals from 2025 illustrate the scale: Benefit Street Partners’ $2.3B continuation vehicle, TPG Twin Brook’s $3B deal, and Crescent Capital’s record $3.2B CV — the largest private credit secondaries transaction ever completed. These are no longer niche deals. They are institutional-grade transactions that belong in the same conversation as the biggest PE continuation vehicles.

The fundraising side is just as telling:

Ares raised $7.1B for its credit secondaries strategy. Coller Capital closed $6.8B last year. These aren’t opportunistic vehicles — they’re permanent capital allocations to a segment that buyers believe is durable. The Ropes & Gray Q1 2026 update projects that overall secondaries fundraising could top $200B raised over the next 12 months, with private credit strategies among the key drivers.

What changes now that everyone is paying attention:

The risk of success in any secondaries sub-market is the same: competition compresses returns. When a segment is niche, information advantages are wide, pricing is inefficient, and disciplined buyers can generate outsized risk-adjusted returns. When Goldman Sachs, Ares, Coller, and Blackstone are all building dedicated credit secondaries platforms, the information edge narrows.

That said, private credit secondaries remain structurally more complex to underwrite than PE secondaries. Loan portfolios require credit analysis at the underlying borrower level. GP relationships, covenant structures, and documentation quality vary enormously. The buyers who built genuine credit underwriting capabilities early — not just repurposed PE secondaries teams — will have a durable advantage as the market matures.

For LPs considering allocations: private credit secondaries now offer something rare — yield-oriented returns with a secondaries premium and a structural discount available at the time of purchase. The J-curve is minimal. The entry point into seasoned assets removes early-life uncertainty. For allocation committees still sitting on the sidelines, the 2025 data is now hard to argue with.

The number to watch in 2026: Whether GP-led credit secondaries volume doubles again, or whether the 300% YoY growth normalizes as the market catches up to itself. Either answer is informative.

Sources: Evercore 2025 Annual Secondaries Report, Ropes & Gray Q1 2026 Secondaries Update, PitchBook

When Kline Hill and Cendana closed their second joint VC secondaries fund at $400M — blowing past a $300M target to hit the hard cap — the headline number was notable. But what it signals is more interesting than what it raised.

This isn’t a mega-fund play. This is a bet on the most illiquid, least intermediated corner of the secondaries market: early-stage VC fund stakes. The kind of positions that are too small for Lexington, too messy for Blackstone Strategic Partners, and too idiosyncratic for most buyers to underwrite with confidence. Kline Hill has been fishing in this pond since 2015. Cendana, one of the most active seed fund-of-funds in the US, brings the relationship network and information edge that turns these deals from a headache into an opportunity.

The JV works precisely because of what each firm brings that the other can’t replicate. Cendana’s portfolio funds — including names like Lerer Hippeau, Forerunner Ventures, and Bowery Capital — surface sellers organically. Family offices and early LPs looking to exit a $2M commitment don’t run a formal process. They call someone they already trust. Cendana fields those calls. Kline Hill prices, underwrites, and closes.

The new fund, structured as KHC Partners Fund II, will deploy across LP position transfers, GP-led transactions, direct company deals, and structured solutions. That last category is worth watching — structured solutions in VC secondaries often means synthetic secondaries, NAV-backed facilities, or preferred equity in aging portfolios that haven’t produced distributions. In a venture market where DPI remains stubbornly low, the demand side of that trade is only growing.

Why this matters for the broader market:

The success of this raise isn’t just about Kline Hill and Cendana. It’s a data point in a larger story about the institutionalization of VC secondaries as a standalone asset class. Five years ago, LP stakes in seed-stage funds were a footnote in secondaries databases. Today, they have dedicated capital, specialist buyers, and — increasingly — motivated sellers.

The structural reasons are well understood: venture funds raised in 2017–2021 are deep in their hold periods. Many have star assets that are still private and show no sign of IPO-ing soon. LPs who committed to those funds expected a 10-year cycle. Some are now in year eight or nine with minimal distributions and no clear exit horizon. For them, selling at a discount isn’t a failure — it’s portfolio management.

For buyers like KHC, that combination of motivated sellers, thin competition, and information advantage is exactly the setup they’re looking for.

The question going forward:

With $400M raised, what does Fund II do differently from Fund I ($105M)? Scale alone changes the dynamics of a market that has historically rewarded patience and selectivity over firepower. Watch how they balance the original thesis — small, relationship-driven, lower-end deals — against the pressure that comes with managing a larger pool. If they stay disciplined, this could be one of the most interesting vehicles in venture secondaries to track over the next three years.

Sources: Secondaries Investor, SecondaryLink, Kline Hill Partners

Photo: Vinted

Vinted, the C2C second-hand marketplace, has completed a €880 million secondary share transaction at an €8 billion equity valuation — one of the most notable secondary deals in the European tech ecosystem so far in 2026.

The transaction was led by EQT — an existing investor doubling down on its position — alongside two new shareholders: Teachers’ Venture Growth (TVG), the late-stage venture investment platform of Ontario Teachers’ Pension Plan, and Schroders Capital. Additional new investors include funds managed by BlackRock, Lombard Odier Investment Managers, and Pinegrove Opportunity Partners. Among existing shareholders, Baillie Gifford chose to increase its stake.

The deal was significantly oversubscribed.

Why This Deal Matters for the Secondary Market

This transaction is a textbook example of secondaries doing exactly what they’re designed to do: providing liquidity to existing shareholders and employees without the company needing to raise primary capital or pursue an IPO.

Vinted is not raising new money here. The company has been cash flow positive for several years, posted €62M in net profit in 2025, and has ample balance sheet capacity to self-fund growth. The secondary serves as a cap table rebalancing tool and a meaningful liquidity event for the team — reinforcing its value as a retention and reward mechanism.

The Financial Profile Driving Institutional Appetite

Vinted’s numbers speak for themselves:

• 2025 GMV: €10.8B (+47% YoY)

• 2025 Revenue: €1.1B

• 2025 Net Profit: €62M

• Markets: 26 countries

The combination of high-growth at scale with sustained profitability is precisely what secondary investors look for in an asset: audited metrics, business visibility, and a credible liquidity horizon — whether via IPO or a future secondary round.

A Shareholder Base Built for the Long Game

One of the most telling aspects of this deal is the profile of the incoming investors. TVG and Schroders Capital are institutional platforms designed to hold positions across both private and public markets — exactly the type of investor a pre-IPO company wants on its cap table to smooth the eventual transition to public markets.

Goldman Sachs International acted as sole placement agent. Cooley provided legal counsel to Vinted.

The Secondary Market Takeaway

This deal reinforces several trends we’ve been tracking at Secondary Scoop:

1. Secondary transactions are no longer a distress signal. Vinted has used them as a deliberate cap table management tool in every funding round since 2015.

2. Institutional LPs — especially pension funds — are increasingly active in growth-stage secondaries. TVG (Ontario Teachers’) is the clearest proof point.

3. Oversubscription signals that demand for quality secondary assets continues to outpace supply, particularly in companies with strong fundamentals and demonstrated profitability.

Full Vinted Press Release: https://company.vinted.com/newsroom/secondary-share-transaction-at-€8B%20equity%20valuation