The Growth of Secondary Private Credit Transactions

Walking down Brickell Avenue these days, you can practically smell the shift in the financial wind. Miami has rapidly evolved into “Wall Street South,” attracting a tidal wave of hedge funds, family offices and private equity titans who are trading the gray skies of Manhattan for the neon pulse of South Florida. But while the skyline continues to climb, a quieter, more stressful conversation is happening behind the closed doors of the city’s glass towers. It is a conversation about liquidity—or the lack thereof. Specifically, the world of private credit is hitting a wall, and the “exit drought” is forcing investors to look toward the secondary market not as a strategic choice, but as a survival mechanism.

The Great Liquidity Squeeze in Private Markets

To understand why This represents hitting the portfolios of Miami’s elite investors, we have to look at the sheer scale of the machinery involved. According to Gerald Carton of Coller Capital, the total volume of capital invested in private markets is a staggering 14 trillion dollars. For a long time, these assets were seen as the gold standard for diversification, offering higher returns than public equities. However, the catch has always been the “lock-up” period. You put your money in, and you wait years for the assets to be sold or taken public to get your cash back.

The problem is that the traditional exits—mergers and acquisitions (M&A) and initial public offerings (IPOs)—have essentially stalled since 2022. This creates a bottleneck. When the front door is locked, investors start looking for the side door: the secondary market. This is where investors sell their existing stakes in private funds to other buyers. In 2025, this market didn’t just grow; it exploded. Total secondary operations for private assets hit a record 226 billion dollars, representing a 41% increase over the previous year.

The Paradox of Private Credit Growth

While the broader secondary market is booming, the story within private credit is more nuanced and, frankly, more concerning. Private credit is a massive asset class, valued at roughly 1.3 trillion dollars. On the surface, the volume of secondary transactions in this space has increased, but analysts warn that this isn’t necessarily a sign of a healthy, liquid market. Instead, it often signals a “forced” surge. When investors can’t get distributions from their original funds because the underlying assets aren’t selling, they are forced to sell their positions at a discount just to get some cash on hand.

The data from Evercore Inc. Highlights a fascinating split in how these deals are happening. In 2025, sales of portfolios by Limited Partners (LPs)—the investors—rose by about 35% to reach 120 billion dollars. At the same time, operations led by General Partners (GPs)—the fund managers—jumped by 50% to 106 billion dollars. While most of these GP-led deals were acquisitions, private credit accounted for 11% of the volume for these manager-led operations. This indicates that fund managers are increasingly using “continuation funds” to hold onto valuable assets longer, effectively kicking the can down the road while trying to provide some semblance of liquidity to their investors.

The Road to 2030: A New Financial Norm

Despite the current tension, some see this as the birth of a more mature ecosystem. Jeremy Coller, the founder and CIO of Coller Capital, predicted years ago that the secondary market would reach an annual volume of half a trillion dollars by 2030. Given the current trajectory, that goal seems well within reach. Currently, secondaries represent only about 2% of the total private market, meaning there is an enormous amount of untapped potential for growth.

For the financial community in Miami, this shift means that the ability to price and trade private assets will become a core competency. We are moving away from a “buy and hold forever” mentality toward a more fluid environment where private equity and credit are traded with more frequency. However, navigating this requires a level of sophistication that goes beyond standard financial planning strategies. The risk of selling too early or at too deep a discount during a liquidity crunch can permanently impair a portfolio’s long-term performance.

The pressure is real. When the “exit drought” persists, the secondary market becomes the only valve for pressure release. For those managing multi-generational wealth in Coral Gables or operating high-frequency funds in the Design District, the priority has shifted from simply finding yield to ensuring that their capital isn’t trapped in an illiquid void. This environment makes consulting with corporate law experts essential, as the structures of these secondary deals—especially GP-led continuation funds—are becoming increasingly complex.

Navigating the Liquidity Crunch in South Florida

Given my background in executive geo-journalism and analyzing market shifts, it’s clear that the “Wall Street South” migration isn’t just about the weather; it’s about the movement of capital. If these liquidity trends are impacting your holdings or your firm’s strategy here in Miami, you cannot rely on generalist advisors. The secondary market for private credit is a specialized beast that requires a specific set of skills to navigate without losing significant value.

If you find yourself facing a liquidity crunch or looking to optimize your private asset exits, here are the three types of local professionals Try to be engaging right now:

Alternative Asset Portfolio Strategists

Look for advisors who specialize specifically in “secondaries” rather than general wealth management. You need a professional who understands the current pricing discounts in the private credit market and has a network of potential buyers (LPs) who are currently hunting for discounted entries into high-quality portfolios.

Private Equity Tax Specialists

Selling a stake in a private fund is not as simple as selling a stock on the NYSE. The tax implications of a secondary sale, especially if the asset is sold at a discount or through a continuation fund, can be grueling. Seek out CPAs who have a proven track record with K-1 tax forms and complex partnership distributions.

Specialized Liquidity Event Counsel

When dealing with GP-led operations, the legal language in the limited partnership agreement (LPA) is everything. You need attorneys who can scrutinize the terms of a continuation fund to ensure that the GP isn’t unfairly favoring certain investors or locking you into a new structure that further restricts your liquidity.

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