Perpetual ’40 Act vehicles, backed by a surge of private wealth capital, are dramatically tightening valuations in the private equity secondaries market, paying premium prices and forcing a wave of strategic platform expansions among both major asset managers and emerging specialized firms.
Evergreen Surge
The surging deployment of evergreen capital is beginning to reshape pricing and deal flow in the secondaries market. These semi-liquid, ’40 Act vehicles are expected to make up one-third of the market with three years.
Market participants say the influence of these semi-liquid structures shows up most clearly in valuations, with buyers and sellers meeting at tighter spreads and high-quality portfolios fetching prices that were once hard to imagine.
Put it another way: the new wave of evergreen funds is starting to ruffle feathers among more established players, who now find themselves outpaced by vehicles that need to constantly put money to work to support incoming flows.
Campbell Lutyens reports that evergreen funds on average pay four percent more relative to face value than the wider market for LP fund stakes.
Unlike traditional funds, evergreens promise quarterly liquidity and a perpetual structure, so they must continually invest new cash to mitigate drag and keep performance strong. This means they often bid more aggressively—and more frequently—than closed-end funds constrained by pacing models and fixed cycles.
The old guard says that the new money is indiscriminately bidding up nearly every significant LP-led auction, needing to invest continuously to support incoming subscriptions and NAV growth.
There’s no doubt the influx of evergreen capital has pushed transaction pricing higher across most categories. Buyers are meeting sellers at tighter bid-ask spreads, and high-quality portfolios are clearing at valuations that would have seemed ambitious a few years ago.
Evercore reports that evergreen buyers won 80 percent of the transactions it was involved in. What’s more, evergreen buyers won the auction with average bids six percentage points higher than closed-fund participants.
The new money buyers shrug off the complaints. They say that traditional secondaries funds, still governed by fixed fund cycles and pacing models, are finding themselves outmaneuvered in competitive processes by evergreen vehicles.
At the same time, a growing number of traditional closed-end fund players are launching their own evergreen vehicles.
HarbourVest Partners, for instance, earlier this month launched its Evergreen Secondaries Solution fund with seed capital from an investor who committed to a five-year lock-up.
The speed of deployment is also changing the composition of deal flow.
Evergreen funds favor diversification and rapid scaling, which has increased demand for large, diversified LP portfolios.
Takeaway: Now, evergreen capital is even seeping into GP-led deals. Sponsors arranging continuation funds say the new entrants are expanding the buyer base, helping them move assets even amid uneven exit markets.
Semi-Liquid Move
Seeking to tap the private-wealth channel, many major asset managers have launched semi-liquid ’40 Act vehicles across all platforms.
“Private clients today are seeking more than just access, they want solutions that deliver performance, simplify complexity and strengthen their portfolios,” HarbourVest’s head of private wealth Venu Krishnamurthy says.
Among the most active in the private equity secondaries space are:
- Coller Capital: The secondaries specialist announced on Tuesday that Coller Secondaries Private Equity Opportunities Fund (C-SPEF) has surpassed $1 billion in AUM as of September 2025.
- HarbourVest: Another firm with a secondaries track record getting into ’40 Act funds. The firm earlier this month launched its Evergreen Secondaries Solution fund with seed capital from an investor who committed to a five-year lock-up.
- Hamilton Lane: (NYSE: HLNE): Launched Global Private Secondary Fund (HLGPS) earlier this year.
- StepStone (Nasdaq: STEP): The firm’s Private Markets (SPRIM) Fund invests in secondaries across private equity, real assets and private credit.
- Long Angle: The emerging manager launched its Evergreen Secondaries Fund.
- ICG/Amundi Partnership Funds: ICG and Amundi have teamed up to roll out new Europe-focused evergreen vehicles, including one dedicated to LP secondaries, aimed at accelerating ICG’s reach into the private wealth channel through Amundi’s global distribution network.
Retail Drive
The retailization of alternatives and the rise of evergreen funds are also major factors behind the surge of emerging managers and strategic expansions by major asset managers into secondaries.
Industry veterans are spinning out to launch platforms designed for the new market dynamic, while established players are pivoting with dedicated funds. The common thread is the pursuit of creative liquidity solutions at a time when private markets are starved for cash.
This surge is pushing the secondaries transaction volume to exceed $200 billion this year, fueled significantly by the increased use of GP-led continuation funds, which Evercore says now account for a record 14 percent of sponsor-backed exit volume.
Evergreens have raised $5 billion in new capital from private wealth and registered retail funds in the past year alone.
- Aqualis Partners: Launched by former Commonfund CF Private Equity secondaries head Cari Lodge, the firm is targeting small LP interests in the lower middle market.
- Hobe Mountain: spun out of David Rubenstein’s family office to also focus on the lower middle market secondaries space. Hobe is led by Todd Buys and Alexa Rachlin, Rubenstein’s daughter.
- Solvo Capital: Launched in 2024 by BNP Paribas veterans Christophe Lenouvel and Arnaud Martin. The firm is seeking to raise its debut fund of approximately $440 to invest in continuation vehicles and other GP-led deals.
- Netley Capital: Founder Caspar Berendsen, a Cinven alum, recently raised $315 million to invest in secondaries of secondaries, a product he calls “tertiaries.”
- Clipway: Vincent Gombault and Ingmar Vallano, alums of secondaries giant Ardian, launched in 2023 with the backing of Carmignac and General Atlantic.
Existing, bigger players getting in on the action:
- New Mountain Capital: The New York firm is seeking to raise $2 billion for its first fund dedicated to continuation vehicles.
- Leonard Green & Partners: The firm raised nearly $2.3 billion for its debut GP-led fund, surpassing its $1.5 billion target. Leonard Green hired David Fox, who previously worked at Blackstone (NYSE: BX), and Garrett Hall, an AlpInvest Partners alum, to manage its new secondaries unit.
- Accel-KKR: Raised $2.2 billion for its software secondaries vehicle AKKR Strategic Capital LP.
Bottom Line: Major investors backing secondaries strategies for the first time also helped fuel the expansion. A blend of large institutional limited partners, alternative asset managers, family offices, and a fast-growing pool of private wealth and retail vehicles. These investors have been drawn to the space for compelling reasons: enhanced liquidity, diversified and derisked exposure, and access to mature assets with more rapid distributions.
Transactions
- Coller Capital led new investors backing CVC’s continuation vehicle, which was launched to retain ownership of Ahlsell, a B2B industrial distributor of technical products.
- Nera Capital raises $50 million for debut litigation secondaries fund.
- MainePERS is considering “de-emphasizing” its natural resources investments by offloading them in the secondary market.
- StepStone Group (Nasdaq: STEP) officially launches its $750 million evergreen fund targeting secondaries, StepStone Private Equity Strategies Fund.
- Italian private bank Banca Investis has added Hamilton Lane‘s European long-term investment fund (ELTIF) to its platform. The fund invests in secondaries and co-investments.
Fundraising
- CVC has raised $6.5 billion toward a $7 billion target for its sixth secondaries fund.
- Hamilton Lane has launched its latest secondaries flagship, co-chief CEO Erik Hirsch told analysts during the firm’s latest earnings call. Hirsch said the firm expects commitments to exceed the $5 billion that the predecessor vehicle raised in 2024.
- Bonaccord Capital Partners has set a target of $1.6 billion for its third GP stakes fund, according to an SEC filing. That’s the same amount Bonaccord’s second fund amassed, closing in January and exceeding its $1.25 billion target.
- Melange Capital Partners, an Austin emerging manager, closed its debut energy secondaries fund in $430 million.
- Brazilian Patria Investments expects to exceed its $500 million fundraising target for its Secondary Opportunities Fund V by 10 percent to 20 percent, CEO Alexandre Saigh told investors. As of September 30, the fund had raised $406 million in committed capital
GP Stakes
- Bonaccord Capital has set a $1.6 billion target for its third GP stakes fund, according to an SEC filing.
- Siguler Guff & Co. acquired a stake in Lass Legal Capital, which specializes in litigation finance.
- Investcorp to acquire minority stake in Vauban Infrastructure Partners.
People
- CVC hired Henri Lusa from Partners Group to lead its new private credit secondaries strategy.
- PJT Partners’ Immanuel Palugod has left the firm to join Bank of America as a managing director in its secondary advisory group.
- William Blair poached Dan DiSalvio from Chicago investment bank Lincoln International to lead its GP-led secondaries strategy.
- Alvarez & Marsal also raided Lincoln for talent, hiring Lewis Tse to head its asset-backed finance group. Tse co-led Lincoln’s ABF unit.
- Aquilius Investment Partners hired HarbourVest’s Martin Yung to expand its Asia private equity secondaries exposure.
That’s the market in motion. Stay sharp and see you Dec. 3. Until then, send tips, quips and tidbits to secondaries@themiddlemarket.
