Prolonged interest rate struggles, market volatility, government policy changes, and a sluggish private equity exit environment have bolstered institutional investors’ concerns about liquidity. According to our research, more than half (59%) of asset owners cite illiquidity as a concern for private investment allocations.

With the exit environment a cause for concern, investors have increasingly leveraged secondary markets and evergreen funds to manage liquidity. The need for liquidity has driven secondary market transactions to new heights. While providing a safety net for secondary sellers, secondary markets offer buyers the potential to capture better risk-adjusted returns by employing a more detailed approach to building their exposures. Similarly, the private evergreen fund space has grown, offering investors increased flexibility via the ability to tactically adjust exposures and enhance the liquidity of their private market portfolios.

As both the secondary market and evergreen funds become common tools for portfolio management (rather than, in the case of the former, an emergency measure for liquidity-distressed investors), asset owners will have more flexibility to reshape their private market exposures and pursue opportunistic initiatives.

Explore this topic and more in The Cerulli Report—North American Institutional Markets 2025. Assess evolving institutional demand and gain comprehensive market sizing and asset projections across key institutional client segments.