Trends to watch in the secondaries market

Recently in Preqin First Close, we identified six trends to watch in the secondaries market. Here, we take another look at one of those trends: the increasing dispersion of returns.

Secondaries performance

Secondaries funds have historically performed well for investors, delivering comparable returns in a narrower range than primary strategies, driven by greater diversification and visibility over the assets being invested in.

According to Preqin data, secondaries funds of vintages 2013–2022 delivered a net IRR of 16.0%, above both buyout (15.3%) and growth (13.0%) – and a significantly lower standard deviation of 13.9% (Fig. 1).

Fig. 1: Median net IRR and standard deviation of private equity strategies (vintages 2013–2022)

_{Source: Preqin}

This past performance, however, might not be repeated. As Ed Gay, Partner and COO at secondaries GP Hollyport Capital, told Preqin News in Secondaries in 2025: ‘One of the challenges for secondary investors is that they’re used to a very tight band of returns. They get a pretty solid IRR and regular cashflows, and everyone’s happy. What the GP-led market has created is the opposite of that. Some secondary funds will do very well, but some will impair capital. If you buy 10 single assets, you look like a pseudo primary fund that doesn't have control – which is a very different dynamic.’

Early performance data supports this view. The older funds in our cohort (vintages 2013–2019) deliver a net IRR of 16.4%, close to buyout (17.8%) and growth (15.8%), but with significantly lower dispersion, and a standard deviation of 9.8% against 15.8% and 14.6% (Fig. 2).

Fig. 2: Median net IRR and standard deviation of private equity strategies (vintages 2013–2019)

_{Source: Preqin}

For more recent vintages (2020–2022), secondaries are performing exceptionally well, showing a 19.0% net IRR against 13.0% for buyout and 6.9% for growth (Fig. 3). One significant element of this outperformance is secondaries funds' maturity and closeness to realizations – they have less of a J-curve.

Fig. 3: Median net IRR and standard deviation of private equity strategies (vintages 2020–2022)

_{Source: Preqin}

More notable is that the range of returns has increased significantly. The standard deviation of more recent (vintages 2020–2022) secondaries funds’ returns is up at 21.3%, compared with 26.3% for buyouts and 16.5% for growth.

This reflects the increasing stratification of the secondaries market, with GPs focusing more on particular niches and transaction types. Our investor surveys and fundraising data highlight the popularity of secondaries among LPs, but future performance will likely look very different to the past.

Grant Murgatroyd is Head of News at Preqin, and Libby Fennessy is Production Editor of Preqin First Close.

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_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.}