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Private markets in motion: secondary investment strategies 

As liquidity tightens, GP-led secondaries are shifting from ad-hoc exits to an institutionalized portfolio-management tool for GPs, LPs and secondary buyers.

GP-led secondaries have moved from a niche liquidity solution to a core portfolio management tool across private markets.

Liquidity is both a constraint and an opportunity in private capital. After rapid expansion and longer private-company lifecycles, many investors hold mature portfolios that haven’t returned capital as expected. Meanwhile, GPs still see value in assets but face tougher exits. Secondaries — once mainly LP resale at discounts — now include GP-led deals that create liquidity, extend ownership of high-conviction assets, and help actively manage portfolios via continuation vehicles.

Drawing on Mercer’s analysis of 148 private equity and real assets secondary transactions between 2021 and 2025 — including 117 GP-led continuation vehicle transactions[1]  — this report examines how pricing, terms and alignment are evolving as the market matures.

In GP-led secondaries, underwriting must separate deals with a genuine continuation of value creation from those bearing conflict—this discipline will shape market credibility and investor outcomes.
Benjamin Baumann

Global Head of Secondaries

Key findings

The growth of continuation vehicles reflects both cyclical pressure — slower exits, constrained distributions and valuation uncertainty — and a more structural shift in how GPs and LPs manage mature private markets portfolios.

Entry EV/EBITDA multiple comparable analysis, and the discount-to-NAV of our GP-led transactions suggest that access to high-quality assets does not automatically require premium pricing. (Note: our data set does not suggest pricing above market comps, and there is an average settlement discount across our GP-led portfolio of 7.9%).

Across Mercer’s PE GP-led sample, the average management fee was 0.85%, 86% of carry structures were tiered and 69% of transactions had a 20% maximum carry. Flat carry is declining; only 3 of 26 of our deals in 2023, 1 of 17 deals in 2024 and 1 of 14 deals in 2025 had flat carry, pointing to a maturing market in which investors have a clearer framework for comparing transaction economics.

Deferred purchase price was present in 15% of Mercer’s PE GP-led key terms sample. Where used, deferred consideration can materially affect the true economics of a transaction by changing the timing, value and risk allocation of cash flows.

Mercer’s data show average GP commitment ranging from 6% to 10% between 2021 and 2025. The case for a GP-led transaction is strengthened where this is supported by cross-fund commitment, full rollover of active equity, transparent treatment of GP economics and more than 50% rollover in underlying portfolio company management.

Entry price vs comparable deals and listed comps, valuation methodology, revenue and earnings growth profiles, market positioning, business plans, margins, capex, free cash flows, fees, carry, deferred consideration, leverage, GP rollover, governance and exit route all interact.

GP-leds can enhance private markets portfolios by providing access to high-quality, shorter-duration, or high-conviction assets. Beyond rigorous asset-level underwriting, continuation vehicles must be evaluated for portfolio-level risks—liquidity, asset concentration, and diversification across managers, vintages, sectors, stages, and revenue drivers.

What GP-led deal terms reveal about the secondaries market

Access concise facts and checks to assess GP-led continuation vehicles.
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About the author(s)
Benjamin Baumann

Global Head of Secondaries

Dusan Senderak

Senior Principal, Secondary transactions

Jose Mota

Senior Associate, Secondary transactions

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Mercer, June 2026. We acknowledge the limitations of our own data set; the pricing, terms and structure across these deals only reflect those to have made it through Mercer’s sourcing, due diligence, and negotiation to transact. They are therefore not representative of the market at large, but reflective of our own selectivity.