2024 Unprecedented Secondary Market Volume: A Vital Liquidity Solution for GPs and LPs

Six months ago, we shared that 2024 was seeing record-breaking secondary market volume. That momentum continued throughout the rest of the year — the secondary market set an annual record in 2024, generating more than $150 billion of volume. This outperformed the previous record set in 2021. According to Lazard's 2024 Secondary Market Report, the annual volume represented an increase of almost 40 percent relative to 2023.

There's a quiet revolution happening in private equity, and it's fundamentally changing how investors think about liquidity. The numbers tell part of the story: GP-led transactions surged 50 percent to $70 billion, while LP-led volumes rose 30 percent to $80 billion. But the real story isn't in the percentages — it's in what these figures represent: a structural shift in how private markets handle the tension between long-term value creation and the need for flexible capital.

Think of it as private equity's version of market innovation. With these milestones as the backdrop, we expect the market will experience continued growth. As alternative investments continue to grow both in absolute dollars and as a share of total investment portfolios, we anticipate liquidity needs will grow. Moreover, the rapid growth experienced in 2024 should serve as an accelerant to future growth, as it advertised the benefits of GP-led transactions to a wider array of sponsors. Given these dynamics, our current expectations are that 2025 will see another record year in secondary volumes.

The democratization of this market is particularly striking. New entrants, retail capital flows, and continued fundraising success have created a deeper pool of available capital. This isn't just about more money — it's about more sophisticated money. Lazard expects the amount of capital available to purchase secondary investments to increase significantly in the coming year with more than 80 percent of secondary investors expecting to raise capital for flagship funds in 2025.

Consider the rise of Continuation Funds. These vehicles solve a fundamental problem in private equity: how to maintain ownership of high-performing assets beyond traditional fund lifecycles while still providing liquidity to original investors. It's elegant in its simplicity — new capital replaces old, while expertise remains constant. This innovation now represents nearly half of annual transaction volumes, a testament to its utility in solving private equity's time horizon puzzle.

The emergence of Single-Asset Continuation Funds as the dominant form of GP-led transactions in 2024 — capturing almost half the market — reveals another crucial shift. When more than half of these deals price at Net Asset Value or higher, it signals strong investor confidence in both the assets and the sponsors managing them.

The LP perspective is equally telling. Institutional investors now manage alternative asset portfolios of unprecedented complexity — often hundreds or thousands of positions deep. The secondary market has evolved from a distressed seller's last resort to a sophisticated portfolio management tool. It's allowing LPs to reshape their portfolios with surgical precision, eliminating non-core relationships and redeploying capital to more strategic opportunities.

What makes this evolution particularly fascinating is its specialization. Dedicated teams now focus on specific strategies — Private Credit, Infrastructure, Real Estate, Venture Capital — each requiring distinct expertise. Meanwhile, retail investors have entered the market through new investment vehicles, their steady capital inflows reshaping pricing dynamics in ways that would have been unthinkable a decade ago.

The implications here extend beyond just market size. We're watching the maturation of a market that's becoming more sophisticated, more specialized, and more essential to the functioning of private markets. As our survey results suggest, this isn't a temporary shift — it's a fundamental evolution in how private markets approach liquidity.

To read the full report visit Lazard.com.

By Peter Orszag , Holcombe Green and Spencer Gyory