LP secondaries hit eighty-seven billion, pricing's up to eighty-nine percent of NAV — and nobody's told me as of what date. This is Infrastructure Secondaries Daily — three firms are counting the market three different ways, and a 2019 rulebook is trying to govern a 2026 problem. Today: Setter's H1 numbers, two hundred sixteen billion in dry powder, and whether the framework was ever built for this. Cassidy, start with the pricing. If today's show was useful, follow us wherever you're listening — the next one will be waiting. From Setter Capital:
This report summarizes the results of our 35-question survey of the most active global buyers in the secondary market for alternative investments, conducted at the end of June 2025. Volume is defined as total exposure (NAV + unfunded in USD) purchased by the respondents, including only deals where a binding agreement was entered into during H1 2025.
Setter's 25th-edition H1 2025 report landed, and here's why I care: it's a third lens. We've got the Jefferies number, the Coller GP-led figure, and now Setter — three firms, three methodologies, all surveying the same market. And Setter's pitch is the methodical survey — they ask principals directly how much closed in infra versus credit versus real assets. The breakdown is where the value is, not the headline total. Right, but watch what happens when you line them up. If Setter's infrastructure slice doesn't square with how Jefferies or Coller bucket the same deals, the gap tells you nobody's counting the same transactions. Which makes the volume records a little less impressive once you ask what's actually in the denominator. One buyer's 'infrastructure' deal is another buyer's 'real asset' line item. And that's the structural problem. When three surveys can't agree on definitions, the aggregate number turns into a vibe with a dollar sign. Here's Wandy Hoh at Macquarie Asset Management:
Purchasing infrastructure secondary assets at a discount to their net asset value (NAV) does not always guarantee success. Rather, it is important to focus on acquiring assets at a discount to their intrinsic value. • The secondaries market presents opportunities for investors to gain immediate exposure to seasoned and high-quality infrastructure assets.
Macquarie's April piece makes a distinction I'll defend all day — NAV discounts don't matter much unless you're buying below intrinsic value. And those are two very different numbers. Right, and notice what's missing from the NAV side of that sentence: a reference date. You can't even start the intrinsic-value math until you know what NAV you're discounting from, and when it was struck. Exactly. Wandy Hoh's team is basically saying: trust the specialist to bridge the gap between a stale mark and what the asset's really worth. Which is a fine pitch — until you ask who's auditing the bridge. And after the Setter H1 numbers we just hit, scale changes that question. If intrinsic-value judgment is the whole edge and deal volume keeps climbing, you're trusting a lot of unverified specialist opinions across an enormous denominator. That's where the discipline starts to fray. This one's from Institutional Limited Partners Association:
While the stigma associated with such deals has diminished, their increasing prevalence raises questions for many LPs. Such transactions require the Limited Partner’s full attention, but the timing of the process is often difficult to predict and is therefore potentially disruptive for LPs, particularly when multiple deals overlap. The structure of these transactions can also be highly bespoke, making evaluating the impact of an election to buy, sell or hold challenging.
So here's the document I keep coming back to — the ILPA GP-led restructurings paper. April 2019. And the first line basically admits these deals used to sit in the zombie-fund corner of the market before they went mainstream. When ILPA wrote this seven years ago, a GP-led was still a novelty. The Setter H1 numbers we just hit, the figures coming up later — they're now pushing half the market. I want to know whether a framework built for one-off deals survives that kind of volume. And look at the table of contents — LPAC engagement on page five, Disclosures on six, Advisors to the Transaction on eight. The architecture's there. I just want to know whether anyone runs the playbook at scale. Right — and the 'Advisors to the Transaction' section is the one I'd stress-test first. Did 2019 ILPA put the conflict in paragraph one, or did it leave room for it to live in section seven, where nobody reads it? Guidance is only as good as the page it lands on, Daniel. A best practice with no date and no enforcement is a suggestion. Commonfund, with Lawrence Shoykhet:
In the wake of a softened exit environment, the LP Second-ary market recorded its largest year on record in 2024. In fact, the $87 billion of LP volume in 2024 would represent the 6th largest year on record for the entire Secondary market. Of this transacted volume, ~40 percent of sell-ers were first time participants in the market, signaling the increasing significance of secondaries as a portfolio management tool.
Let me take the bull case seriously for a second, because Commonfund earns it. Eighty-seven billion dollars in LP volume in 2024 — that alone would've been the sixth-biggest year ever for the whole secondary market. The growth is real. But here's where I slow down. They cite Evercore's two hundred sixteen billion dollars in dry powder and say the expectation is all of it gets deployed in 2025. Flush buyers, soft exit environment — with capital that patient and sellers that aren't, the discount turns into a negotiating position. And notice what Commonfund slips in — average pricing ticked up four hundred basis points, from eighty-five percent of NAV. As of when, against whose NAV? That's an aggregate moving across a year with no reference date on the underlying mark. Right, and forty percent of sellers were first-timers. A pension hitting the secondary market for the first time, facing two hundred sixteen billion dollars of buyers who can wait them out — guess who absorbs that fifteen-point gap to a stale NAV. Brigid Connor; Victoria Chernykh, writing in Preqin:
Investor concern over the private equity exit environment1 is at historically elevated levels (Fig. 1.1).2 As interest rates rose in 2022 and remained elevated, the exit environment soured, leaving investors with fund extensions rather than distributions. The aggregate exit value for the trailing four quarters ending Q1 2025 ($400.8bn) is about 10% lower than the period Q2 2019–Q1 2020 ($440.8 bn) according to Preqin data.
So Preqin puts continuation funds at almost half the secondaries market. Half. And the framework everyone's still nominally working from — the ILPA GP-led document we hit earlier — was written in 2019, when these things were a novelty. I want to give the bull case its due here. The soft-exit environment since 2022 is real, and so is the liquidity need. Preqin's right that the LP-led market deepens. My issue is the rulebook: it was built for novel transactions, and now it's governing half the flow. And notice what's missing from a forecast that goes out to 2029 — a single discount band with a reference date. Preqin says infra secondaries grow faster and price higher through 2029. Fine. Faster off what NAV, marked as of when? That's the gap, though. Setter gave us a volume lens this morning, Coller and Jefferies gave us theirs, and now Preqin's stacking a six-year AUM forecast on top — but none of them are clearly counting the same infra deals. The headline number gets bigger; the definition doesn't get clearer. Have feedback on today's briefing, a story idea we should follow, or a correction? Send us a note at infrastructuresecondariesdaily at lantern podcasts dot com. We read every message, and we appreciate you helping make the show sharper.
You'll find links to every story we covered today in the show notes, so if something deserves a closer read, that's the place to start. That's Infrastructure Secondaries Daily for today. This is a Lantern Podcast.