Secondaries Unlocked: A Seller’s Perspective and Outlook

Key Takeaways

• Secondary transactions should not be passive clean-up exercises. As fiduciaries, Adams Street evaluates each potential sale to balance investor liquidity needs against long-term value creation. Our goal is disciplined execution that aligns with broader portfolio objectives while trying to avoid sacrificing upside simply to remove legacy positions
• Secondary sales can take up to eight quarters to complete, starting with valuations that can already be months old. The complex process can involve many parties and cannot be timed for market peaks, which explains why legacy investments can remain on investor books longer than expected
• With nearly 30 years of secondary market experience, and over $5 billion in completed sales, Adams Street actively works to wind down older funds when conditions allow. Market constraints, price dispersion, and structural limitations can make this challenging, but our experience helps enable thoughtful execution that seeks to add value through liquidation rather than forced selling

Once viewed primarily as a tool for distressed sellers, the private equity secondary market has evolved into a core component of institutional portfolio management. Secondaries now offer strategic flexibility for both limited partners (LPs) and general partners (GPs), enabling portfolio rebalancing, liquidity generation, and fund restructuring.

For a pension fund, university endowment, or other sophisticated asset owner, the process of pursuing a secondary sale can be relatively straightforward, even though it is likely to be complicated by the involvement of numerous parties in the settlement across a number of quarters.

For a private markets investment manager such as Adams Street, being a fiduciary to various stakeholders with a range of perhaps competing objectives, there are additional requirements and considerations. Chief among those is a need to thoughtfully balance investors’ desire for liquidity with our responsibility to maximize long-term value. This means trying to ensure that any sale satisfies the twin requirements of serving the broader objectives of our investors and meeting our fiduciary duties.

Inside the Secondary Sale Process
The decision to pursue a secondary sale begins with Adams Street’s Portfolio Construction Committee (PCC), which regularly evaluates opportunities to generate liquidity, manage exposure, and rebalance portfolios. Once the PCC approves the exploration of a potential sale, we engage a banker to advise on refining portfolio design and go-to-market execution. The banker’s key role is to maximize outcomes and run an efficient and competitive auction process, for which they earn a fee based on transaction size.

From the PCC’s “Go” decision to final closing, the process can take up to eight quarters. Valuations provided to buyers at the beginning of the process may already be six months old. Liquidity therefore comes with a cost. Combined with the lengthy execution timeline, this inherent lag makes it impossible to “time the market” for maximum pricing.

For this reason, Adams Street approaches secondary sales systematically. We evaluate and conduct transactions on a regular basis, typically focusing on funds reaching the 10-year threshold. Any earlier and there is greater risk in missing upside performance; any later and the remaining assets are more likely to require steep discounts to move them off the books. Our approach is designed to ensure a disciplined and repeatable process that seeks to balance liquidity needs with long-term value creation.

Strong Secondaries Experience
While our first secondary purchase took place in the mid-1980s, our first significant secondary sale didn’t happen until 1996, with the wind down of an institutional evergreen venture fund. Since then, Adams Street has regularly brought secondary sales to market, totaling more than $5 billion. These transactions have ranged in size and complexity, but over time have developed more repeatable processes as the number of buyers and secondary capital has grown. The table below summarizes the portfolio sale transactions by vintage, highlighting the varying characteristics and outcomes achieved across nearly three decades of participation in the secondary market. The portfolio sizes shown reflect the initial asset pool presented to the PCC for consideration; those amounts were subsequently refined through banker consultation and transaction structuring as the final assets included in the sale were determined.

Image

Our 2019 transaction demonstrates the benefits of active portfolio management and responsiveness to market demand. Initially structured to include a limited number of fund interests, the deal team expanded participation after buyers expressed unexpectedly strong interest and pricing for several underlying funds. This adaptive approach allowed Adams Street to capture incremental value and provide liquidity across all entities with exposure to the targeted funds.

Some of our most recent transactions illustrate the scale and efficiency of our systematic approach. In early 2024, we engaged an intermediary to lead a secondary process with the goal of winding down Adams Street managed entities that had existed since at least 2009 and providing substantial liquidity to relevant investors. The initial 2024 transaction represented over $1 billion in net asset value and closed with a single secondary buyer.

Image

Following strong market demand and attractive pricing, we executed an additional transaction, concurrently with the first, selling an additional $440 million in commitments to the runner-up buyer from the first transaction. Together, these transactions enabled the orderly wind down of some of Adams Street’s older funds while also securing what we viewed as favorable outcomes for our investors.

Finally, our most recent processes in 2025 and 2026 began as one process before splitting into two distinct sales to maximize outcomes. The process included meaningful revisions to the portfolio for sale and a large set of interested buyers, ultimately concluding in the sale of a distinct subset of assets for non-venture, and a distinct subset that was venture-focused. Transactions such as these underscore our ability to execute complex secondary sales with discipline and purpose.

What We’ve Learned
Our experience across multiple secondary sale processes has reinforced several important lessons:

• Liquidity has a cost. Secondary sales can provide an efficient path to liquidity; however, sellers must weigh the benefit of immediate liquidity against the value of continuing to hold the asset and ongoing monitoring. Liquidity is rarely achieved without trade-offs—most notably, accepting some discount to reported value and giving up potential future upside.
• Timing within a fund’s life matters. In our experience, there can be meaningful benefit to evaluating a sale as a fund approaches the 10-year threshold. By that stage, much of the value creation has often already occurred, while the remaining tail may offer more limited upside relative to the benefits of liquidity, redeployment, risk reduction, and administrative  simplification. We believe it is better to try to optimize by selling assets during targeted maturity windows rather than rely on the market to optimize price at some undefined future date.
• Market sentiment matters, but discipline matters more. Buyer appetite and pricing can vary meaningfully over time, but outcomes are also shaped by portfolio selection, process design, and execution. In our experience, pricing for larger, high-quality portfolios is generally relatively efficient, particularly given the amount of dry powder available for larger transactions.
• Relationships matter. Secondary sales must be managed carefully with buyers, intermediaries and the GPs to avoid unintended consequences for important long-term partnerships.
• Experience improves execution. Repeat participation in the secondary market has benefited Adams Street as we refine both our sale process and our judgment around when and how to pursue liquidity.

Our more recent sale processes have also helped inform how we structure some of the funds we manage with future liquidity considerations in mind. As one example, we modified the wind-down mechanics for one of our flagship funds to require Adams Street to use commercially reasonable efforts to evaluate transactions to generate liquidity prior to the 11th anniversary of the end of the fund’s offering period. The tools available to manage our investors’ capital have changed over time, but the overarching pursuit to generate attractive risk-adjusted returns remains unchanged.

The Road Ahead for Secondaries
Looking ahead, we think the secondary market is poised for continued expansion. Full-year 2025 volume reached a record $240 billion,¹ supported by strong capital availability and the growing scale of secondary funds. Buyside capital remains concentrated among the market’s largest participants, which has supported demand for larger transactions. We expect continued innovations in deal structuring, which should further enhance market efficiency and accessibility. Against this backdrop, it is Adams Street’s intention to continue to use the secondary market as a portfolio management tool with the ultimate goal of enhancing returns, managing risk, and addressing liquidity needs over time.

READ MORE FROM ADAMS STREET PARTNERS

1. Jefferies Global Secondary Market Review, January 2026, Page 3

Important Considerations: This information (the “Paper”) is provided for educational purposes only and is not investment advice or an offer or sale of any security or investment product or investment advice. Offerings are made only pursuant to a private offering memorandum containing important information. Statements in this Paper are made as of the date of this Paper unless stated otherwise, and there is no implication that the information contained herein is correct as of any time subsequent to such date. Statements made herein generally represent a mixture of either (i) objective data attained through a variety of sources which is believed to be reliable and current, but accuracy cannot be guaranteed, or (ii) Adams Street’s analysis and related beliefs, opinions and views based on market observations, historical deal flow, experience and/or other factors; provided, however, that there can be no guarantee that this represents a complete universe of relevant data or opinions. References herein to specific sectors, general partners, companies, or investments are not to be considered a recommendation or solicitation for any such sector, general partner, company, or investment. This Paper is not intended to be relied upon as investment advice as the investment situation of individuals is highly dependent on circumstances, which necessarily differ and are subject to change. The contents herein are not to be construed as legal, business, or tax advice, and individuals should consult their own attorney, business advisor, and tax advisor as to legal, business, and tax advice. Past performance is not a guarantee of future results and there can be no guarantee against a loss, including a complete loss, of capital. There can be no guarantee that (i) that future transactions will demonstrate similar characteristics as those described herein, (ii) that Adams Street will be successful in generating liquidity opportunities for any of its portfolios, or (iii) as to the timing or attractiveness of any such liquidity opportunities that are generated. Certain information contained herein constitutes “forward-looking statements” that may be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Any forward-looking statements included herein are based on Adams Street’s current opinions, assumptions, expectations, beliefs, intentions, estimates or strategies regarding future events, are subject to risks and uncertainties, and are provided for informational purposes only. Actual and future results and trends could differ materially, positively or negatively, from those described or contemplated in such forward-looking statements. Moreover, actual events are difficult to project and often depend upon factors that are beyond the control of Adams Street. No forward-looking statements contained herein constitute a guarantee, promise, projection, forecast or prediction of, or representation as to, the future and actual events may differ materially. Adams Street neither (i) assumes responsibility for the accuracy or completeness of any forward-looking statements, nor (ii) undertakes any obligation to update or revise any forward-looking statements for any reason after the date hereof. Also, general economic factors, which are not predictable, can have a material impact on the reliability of projections or forward-looking statements. Adams Street Partners, LLC is a US investment adviser governed by applicable US laws, which differ from laws in other jurisdictions.