Retail Investors Are Driving Growth in the Private Equity Secondary Market

May 12, 2025

Wealthy individual investors are increasingly turning to the private equity secondary market to gain access to high-yield opportunities traditionally dominated by institutions. Through so-called “evergreen funds”—vehicles that allow ongoing contributions and redemptions—retail capital is now helping to fuel a surge in secondary market activity.

In recent months, several fund managers have used these flexible structures to buy stakes in existing private equity investments, often paying premium prices. This is providing liquidity to institutional holders, such as pension funds and endowments, who are looking to offload positions amid broader portfolio rebalancing.

Managers like Hamilton Lane and StepStone are leading the trend, using capital from their open-ended funds to acquire secondary positions. These transactions often involve paying a smaller discount—or even full price—for assets that would typically trade below their net asset value. That willingness to pay more reflects strong demand from new entrants eager to access private equity returns without the long lock-up periods of traditional funds.

For sponsors, the influx of retail capital represents a powerful new exit option. And for investors, it’s a way to tap into established portfolios with known performance histories—something increasingly attractive as interest in alternative assets grows.

This shift could mark a broader transformation in how capital flows into private markets, opening the door for platforms like LPShares that aim to bring transparency, access, and liquidity to LP interests.