Private Equity Mid‑Year Review: Why GP‑Led Secondaries Are the New Essential - 0100 Weekly Brief
Hey there!
We’re halfway through 2025, and the private equity landscape is evolving rapidly. Liquidity constraints, reduced LP distributions, exit delays, and slowing fundraising are reshaping GP strategies.
This week, we’re breaking down what the latest reports from PitchBook, KPMG, the Financial Times, and a recent interview with Schroders Capital reveal about market shifts, and how private equity firms are adapting to them.
In the interview, Schroders Capital’s Petr Poldauf explains why GP-led secondaries are becoming a strategic pillar for liquidity management and long-term value creation, especially in Central and Eastern Europe.
Market Snapshot: Slowing Fundraising Meets Rising Secondary Volume
Global fundraising continued to slow in Q1 2025, with buyout strategies hardest hit, as LP payouts remained constrained and economic uncertainty weighed on capital flows. At the same time, secondary fund activity surged, building on nearly $160 billion in deal volume through 2024, highlighting LPs’ growing reliance on secondaries for liquidity glide management and portfolio rebalancing.
Private equity dealmaking also slowed in Europe, with total deal value declining by 10.5% quarter-over-quarter. The decline came in response to increased geopolitical volatility, particularly the tariff announcements from the U.S., which introduced hesitation into cross-border M&A activity.
Despite this, the deal count rose slightly by 3.1%, driven by a rebound in activity later in the quarter as European central banks continued to cut interest rates.
Regional dynamics continue to evolve, with the UK and Ireland regaining market share, while activity in the DACH countries (Germany, Austria, and Switzerland) has cooled significantly. The UK benefited from early bilateral tariff negotiations with the U.S. and saw a resurgence in take-private deals.
In contrast, the DACH region, which had a record-breaking Q4 2024, experienced a sharp decline in Q2 deal activity due to persistent macroeconomic uncertainty, rising financing costs, and sectoral exposure to industrials and manufacturing, which are areas particularly vulnerable to U.S. tariffs.
The introduction of new U.S. trade tariffs in Q2 2025 had a noticeable impact on European private equity activity. Following the announcement, dealmaking paused briefly in April as market participants assessed the potential scope and duration of the tariffs.
Sectors with high exposure to cross-border trade, particularly B2B and B2C industries such as industrials, logistics, consumer goods, and retail, faced the greatest risk, as they account for nearly two-thirds of PE-backed companies in Europe.
The Rise of Secondaries: A Market Hitting New Highs
In a market defined by stalled exits and liquidity constraints, secondary funds have emerged as one of the winners of 2025.
As the Financial Times recently noted:
“Who benefits when markets lurch? Generally, those sitting on giant piles of cash.”
Private equity firms had $1.6 trillion in dry powder globally at the end of Q3 2024, according to PitchBook. But it’s secondary funds — which buy stakes in existing portfolios or LP commitments — that are increasingly stepping in to ease liquidity pressure.
With many large LPs (e.g., pension and endowment funds) overexposed to private equity and desperate for distributions, secondaries offer a lifeline. The discount to NAV at which deals are being done has widened, with prices falling to around 75 cents on the dollar, according to Preqin. That translates into higher return potential for buyers, making 2025 a buyers’ market in secondaries.
What to Watch in Q3
Will dual-track exits materialize as viable alternatives to IPOs or strategic sales?
How will LP sentiment evolve if distributions remain low?
Will secondary pricing rebound, or will discounts continue to deepen?
Could private credit play an even larger role in financing new deals as banks remain cautious?
The Role of GP-Led Secondaries more than a Niche: Insights from Schroders Capital
In a recent interview, Petr Poldauf, Senior Investment Director at Schroders Capital, shared his insights on how GP-led secondaries are evolving from niche solutions into essential tools for private equity firms.
Drawing from Schroders’ experience in the European market—particularly in Central and Eastern Europe—Petr explores how secondaries are enabling liquidity, extending holding periods for high-performing assets, and offering LPs more flexible exit options in today’s constrained environment.
Exploring the Mid-Market Momentum at 0100 International: "LPs Shift to Mid-Market: What’s in Store for PE Fundraising Next?"
As private equity adapts to new fundraising realities, join us this October at 0100 International for a timely panel: “LPs Shift to Mid-Market: What’s in Store for PE Fundraising Next?”
This discussion will bring together four leading voices in the LP community: Bernardo Marques Dos Santos (Principal, Qualitas Funds), Marcus Johannisson (Partner & Head, Coeli Investment Partners), Marcus Storr (Head of Alternatives, FERI), and Nicolas Petitjean (Managing Director, Partners Group). Together, they’ll unpack how LPs are reassessing allocations in today’s uncertain macro environment and why mid-market funds are gaining prominence.
The session will explore how today’s market conditions are reshaping GP-LP dynamics, what it means for large-cap and emerging managers, and how LPs are navigating valuation sensitivity, dry powder concerns, and the search for differentiated returns.
Across the Market | Key Perspectives from The First Half of 2025
The first half of 2025 has pushed both GPs and LPs to reassess long-standing assumptions across private equity. From shifts in fundraising dynamics to changing exit strategies, investors are re-evaluating what drives performance in today’s more selective environment.
Here’s a snapshot of how market conditions look across the ecosystem, and what that might mean for the second half of the year.
🗞️ News | Fintech funding lags deeptech, health and B2B SaaS in H1 2025
In the first half of 2025, Europe’s fintech sector experienced a noticeable decline in venture funding, falling 20% year-over-year to €3.7 billion, down from €4.6 billion in the first half of 2024. Deal volume also dropped nearly 15%, with only 275 fintech deals completed.
Meanwhile, investor attention shifted toward deeptech, healthtech, and B2B SaaS, each of which raised over €5 billion in funding. The data highlights how VCs are prioritizing sectors with perceived higher innovation potential and more favorable growth conditions.
📊 Report | The European tech ecosystem: H1 2025 Report
Over the past three years, investor behavior has undergone major changes. In H1 2023, deal volume peaked with over 2,300 transactions, yet total capital raised was at its lowest, €28.7 billion, indicating widespread but smaller investments. H1 2024 saw funding hit a high of €50.1 billion, despite only a modest rise in deal count.
By H1 2025, the market began to correct: deal activity remained steady at just under 2,000, but funding fell by more than 30% year-on-year, signaling a more cautious and selective investment climate.