Blog Post
The rise of the private credit secondary market
With $20 billion in deal volume, 2025 was the largest year on record for the credit secondary market.
Credit continuation vehicles (CVs) generated $12 billion in deal flow, driven by several multi-billion-dollar transactions as sponsors wrap up older vintages (Campbell Lutyens). CVs represent the majority of secondary market deal flow and tripled in volume year-over-year, according to Jefferies Credit Partners.
Dedicated fund mandates, distinct cash-flow profiles and secondary funds flooding the space with capital have driven the explosive growth of the private credit after-market — a shift that would have seemed unlikely as recently as Q3 2024.
The secondary market is now a standard liquidity tool for credit managers navigating frozen M&A conditions. “If the M&A market is frozen, what it should mean is that the secondary market in private equity and private credit is robust in theory,” said one secondary transaction attorney.
Activity has continued to grow, with key players including Coller Capital (acquired by global private equity firm EQT in January), Banner Ridge, Pantheon, Harbourvest Partners and CVC Secondary Partners. Recent high-profile CV transactions include Antares Capital and Ares Management Corp.’s $1.7 billion CV announced in March; Crescent Capital’s $3.2 billion credit CV led by Pantheon in January; and Benefit Street’s $2.3 billion continuation vehicle led by Coller Capital in Q3 last year.
Dedicated secondary funds offer a higher price and faster close time than fellow credit managers, who may be more familiar with the seller’s portfolio names and require longer due diligence to assess fair value. However, dedicated secondary funds face limitations including aversion to PIK loans. Out of 171 business development companies (BDCs), aggregate PIK loans represent 13% of total debt investments in Q4 ’25.
“It has always been hard for secondary buyers to buy PIK because BDCs are in the same boat — ofttimes PIK looks a lot like equity,” said one credit secondaries attorney.
Octus data show aggregate debt nonaccruals increased steadily throughout 2025, reaching 0.77% of total debt investments at fair value in Q4 ’25. Rising nonaccruals could signal motivated sellers entering the secondary market.
Credit transaction advisory firms and law firms are racing to build advisory teams with experienced secondary practitioners. Senior hires are commanding signing bonuses of up to $1 million as competition for talent intensifies alongside deal volume.
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