Partner at Ares Management’s Secondaries Group, Barry Miller, said 2025 is shaping up to be the biggest year on record for secondary market transactions.
“This is a market that’s here to stay. This is a market that will continue to grow.”
From public pension giants like the New York City Retirement System – whose US$6 billion transaction marked one of the largest single deals in history – to storied endowments such as Yale and Harvard, institutional players are entering the secondaries space with renewed urgency.
“We saw the New York City retirement system with one of, if not the largest secondary transactions out there at US$6 billion, sold to a single buyer back in June,” Miller told InvestorDaily.
“Due to the lack of liquidity in the primary market, we are seeing more large, sophisticated investors entering the secondary market.”
This surge is largely driven by constrained liquidity in the primary fundraising environment. According to Ares, momentum is strong across both LP and GP-led transactions.
Miller noted a dramatic evolution in GP-led secondaries over the past 15–20 years. Once seen as a last-resort option for struggling sponsors and challenged assets, today’s GP-leds often involve high-performing managers rolling over top-tier companies.
“I think when 15 to 20 years ago, the GP-led market was around there, they had a different perspective. They were companies that were challenged, they were sponsors that were challenged. At the time, they were referenced as zombie funds,” Miller said.
With the traditional 10-year private equity fund life cycle increasingly mismatched with long-term value creation, continuation vehicles are enabling extended compounding of returns.
As a result, there is roughly now a 50/50 split between LP-led and GP-led deal flow – with a growing share of capital directed towards dedicated GP-led strategies.
“If we look at that going forward, just for this year alone at somewhere between US$200 and US$225 billion of what we believe overall transaction volume will be … You’re talking about numbers in US$125 million range for GP-led.
“From an overall market standpoint, we are seeing more GP-led only products coming out of the market than we’ve ever seen before.”
Pricing dynamics remain bifurcated. On the LP side, larger transactions are attracting narrower discounts, while smaller deals tend to see more variability.
Meanwhile, the GP-led space is evolving into a syndicated market, with large transactions increasingly structured around multiple co-leads – often limiting access for smaller players.
According to Ares, it is focused less on entry discounts and more on long-term growth potential, as many GP-led opportunities now mirror the cash flow profiles of traditional co-investments or buyouts.
“In many cases, there may not be any availability for smaller players in the business, in the industry,” Miller said. “So as we look at this going forward, we look at the GP-led market today, we are seeing single-digit discounts, and we continue to focus on those assets as an industry more about growth.
“It’s less about the discount on entry, it’s more about the growth opportunity going forward, with a cash flow profile that has some similarities to traditional co-investment and traditional buyout.”
In the Australian market, Miller said he sees secondaries gaining traction across both institutional and wealth segments. Investors are increasingly using secondaries as a tool for portfolio construction and liquidity management – consolidating relationships and optimising manager exposure.
On the GP-led side, interest is growing, though there’s still an education gap. Terms like “GP-led” and “continuation vehicle” are often misunderstood, despite referring to similar structures. For now, LP-led deals remain more common in the region.
“This notion of entering the secondary market, not from a de-stress or a stress position, but from a position of portfolio management – we are seeing more of that.
“As you look at the GP-led market, there is a little bit of the education curve, it has to do with the vernacular or the jargon,” Miller said.
“People ask if you do continuation vehicles or GP-leds, and then the conversation really suggests that they are both the same.
“There is clearly a growth in the level of interest for GP-leds, but it’s a little bit more on the education side. We are seeing more people executing on the LP side.”
Ares manages dedicated secondary strategies across private equity, credit, infrastructure and real estate. While private equity remains the most mature and active, new entrants are emerging in credit and infrastructure, while real estate activity has remained steady.
“We see opportunities on all four of the fronts. We see growth and continued growth in the markets.”
“If you look at private equity transaction volume growth over the last 15 to 20 years, what you’ll note is that every five years, transaction volume has doubled … [and] if you look at GP-led volume alone, go back five or six years ago, GP-led volume today is as big, if not bigger than what transaction volume was five to six years ago,” he said.
“So while we are seeing this growth in transaction volume, the amount of capital being raised is not keeping up with the growth in transaction volume. So we’re seeing a widening of the gap.”
Miller highlighted the sector’s high degree of selectivity, with Ares turning down approximately 98 per cent of opportunities.
“We continue to be able to focus in that 2 per cent plus or minus range of selectivity … So being able to be selective has been incredibly attractive,” he said.
With companies staying private for longer and public markets shrinking, Miller said he believes private equity continues to offer uncorrelated exposure and the potential for outsized returns.
