2024 Secondary Market Overview
Category: Secondary market overview Year: 2024
We are very pleased to share our annual 2024 Secondary Market Overview, which provides insights on the dynamics, trends and factors that have shaped the asset class across the last 12 months.
Despite a slower start to the year, positivity returned to the secondaries market in the back end of 2023. Aligning neatly with our surveyed buyers' optimistic expectations at the halfway point, both transaction volumes and total value of secondary funds rallied from July to December.
We also witnessed an interesting switch in the volume of multi-asset vs single asset continuation fund transactions, with the latter outpacing the former by 6%. This is the first time we've seen this since 2019, driven by the need for larger transactions to maximise liquidity for LPs.
Gerald Cooper
Partner & Head of North American Secondaries
While signs may point to 2024 being a record year for the secondaries market, the outcome, of course, remains to be seen. One certainty, however, is the industry's resilience during challenging times, and the growing number of opportunities it offers to investors to put dry powder to work.
Key findings include:
Transaction volumes bounced back
Secondary volumes reached the second largest amount on record, growing from $40 billion in H1 2023 to $71 billion in H2.
LP-leds remain prominent
For the second year in a row, LP-led deals comprised a majority of the 2023 secondary market - both by transaction volume (51%) and number of transactions (50%).
A year for alternatives
LP-led infrastructure secondary volumes grew to represent 12% of transactions by volume - nearly triple that of 2022 levels - and the private credit market doubled exactly in size, pointing to a defining 2024 for the asset classes.
Record fundraising year
The amount raised grew by almost 20% compared to 2022. This fundraising success, against the backdrop of an extremely challenging exit and distribution environment more broadly, supported a record $174 billion of dry powder available at the beginning of 2024.
Pricing rebounds in H2 2023 by nearly six percentage points
On average, secondary discounts for LP-led transactions decreased from 22% at the end of 2022 to 16% at the end of 2023. Portfolios including the best assets priced in the low single-digit discount territory,