Private equity is supposed to be a patience game. You commit money, then you wait years for the payoff.
For big investors who need cash sooner, options used to be limited. But there's a side market where investors sell fund stakes to someone else, and it just hit a record.
The secondary market for private assets, where investors buy and sell stakes in private equity funds, recorded $121 billion in the first six months of 2026.
That pace puts the full year on track for $250 billion, says Nigel Dawn, Evercore's global head of private capital advisory.
Dawn spoke to Bloomberg TV on August 12, 2026, and he says this is not just a busy stretch. It's a structural shift, driven by big institutional investors who are not getting the cash they expected from their private equity portfolios.
When those payouts fall short, the institutions that put money into private funds, known as limited partners, turn to the secondary market to raise cash. Even after that burst, secondary trades represent only about 2% of private assets held around the world.
That leaves a lot of room to grow. "The secondary market is core market infrastructure right now," Dawn said.
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Inside the secondary market, the balance of power has shifted. Deals led by the firms that manage private equity funds, called general partners, now lead the market over deals led by limited partners.
General partners are using something called single-asset continuation vehicles to hold on to companies they think still have room to run. These structures let them move a prized asset into a new fund so they can keep betting on its growth.
Software-focused continuation deals had dropped sharply, but now they're recovering. Investors are being far more selective, and they're favoring vertical software built for a specific industry, where AI is an enabler rather than a threat.
Horizontal software, the kind built to serve everyone, is getting more scrutiny. The worry is that AI could disrupt its pricing and business model.
"Investors have had time to analyze which business models are reliable to be durable and which are likely to be challenged," Dawn said.
In the broader buyout market, pricing has largely normalized. Roughly 90% of the latest valuations now serve as the effective deal price.
Dawn sees that as a sign buyer demand and seller expectations are back in balance. "The market is coming back," he said.
Evercore projects another $150 billion in secondary-market fundraising in the second half of 2026. Dawn says capital is not the constraint.
"Our sense is there is enough capital available," he said. The main brake on growth is the process of raising new funds, known as capital formation, not a shortage of assets for sale.
What does that mean for your portfolio? The secondary market is where private funds get a price check, and those prices become benchmarks when private companies eventually reach public markets.
The same AI debate playing out here, about which software businesses are durable and which are vulnerable, is also playing out in public software stocks. The difference is that private investors are backing their views with real cash, which tends to make the conclusion a bit more honest for anyone sizing up the software names in their own portfolio.
For investors in public stocks, the private market is a preview. The AI winners and losers get sorted out earlier here, and the prices paid in these deals often show up later in public market valuations.
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