Home / Business and Economy / Accounting Quirk Drives Mania in Private Market Secondaries
Accounting Quirk Drives Mania in Private Market Secondaries
16 Aug
Summary
- Investors buying private assets at a discount, then revaluing at par
- Secondaries market growing rapidly, especially in private credit
- Blackstone sees secondaries as best-performing strategy in Q2 2025
As of August 16th, 2025, the demand for secondary funds focused on private markets is soaring. This is partly due to an accounting quirk that allows some investors to buy assets at a discount and then revalue them at par, creating a sense of "free money" and a "mania" in the market, according to Blue Owl Capital's co-CEO Marc Lipschultz.
The secondary market, which allows investors to buy or sell stakes in private-asset funds, has become an increasingly popular solution as higher interest rates have made some valuations more difficult to justify, leaving managers unable to exit investments. Credit is expected to be the fastest-growing part of secondaries, with the number of transactions forecast to grow from $10 billion last year to over $17 billion in 2025.
Investors in private credit funds are now able to shift their positions into the secondary market, clearing a bottleneck in the financing chain that started when dealmaking stalled, forcing private company owners to hold on to assets for longer. This has also benefited some buyers, as the accounting treatment allows them to mark up the acquisitions and bolster the value of the assets.
The wider secondaries trend has proven fruitful recently, with the strategy being the best-performing for Blackstone in the second quarter of 2025. Other firms, such as Coller Capital and Ares Management, have also seen significant growth in their credit secondaries businesses.
