There has been “excellent” growth in the private equity secondary market, Lexington Partners managing director, Philip Smelt, has suggested.

Speaking at the Pensions and Lifetime Savings Association (PLSA) Investment Conference 2025, Smelt said that the global secondary market has continued to have "really excellent" growth.

He noted that there has been USD 150bn of secondary growth in the global secondary market, in addition to a “big explosion” of GP-led secondary deals in the past few years.

He emphasised that the overall secondary market is four times greater than a decade ago, calling it a high-growth market.

When asked in the session about the reason behind this growth, Smelt said it was due to a whole variety of reasons, but in particular, emphasised that the amount of capital being committed to private markets was a “key driver”.

“Private markets and private equity continue to be a real good destination for many investors,” he stated.

“A lot of investors are looking to deploy capital to these private markets. Secondaries have become a really established asset class.”

He also suggested that the turnover rate has been "very" consistent in recent years and is becoming a “very established” asset class for sellers.

Later in the session, Apex Group senior vice president investment advisory, William Martinez, highlighted that another key aspect of the conversation on investing in secondary private markets was access.  

“How you access that market is a critical consideration,” he said.

Martinez suggested that, in addition to this, in a defined contribution (DC) context, how funds integrate private equity with its operational requirements and restraints was important.

“If you look at a portfolio that has a long-term multi-decade program, it will typically include exposures to primary funds and other investments,” Martinez added.

“However, in a DC context that might not be too practical, given the operational complexities, the illiquidity of primary funds, the blind pool risk.

“Therefore, having secondaries mitigates a lot of the danger to an extent while providing an exposure to private equity.

"Selecting the right general partner (GP)-led secondary and the right funds is critical.”

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