Davis Polk partner and Investment Management practice head Leor Landa and partner Sijia Cai were featured in Private Debt Investor discussing the difference between equity and credit secondaries funds and the current state of the market.

When asked about how the private credit secondaries market has evolved, Sijia noted “The secondaries market overall has been expanding in recent years as market acceptance of secondaries as a liquidity and portfolio management tool has increased… We expect growth to continue and desire for liquidity to keep driving demand.”

Leor added that the credit secondaries market doubled in size in 2024 and doubled again in 2025, “The momentum we were waiting for has finally unlocked.”

Discussing key distinctions between a GP-led private credit transaction and a GP-led private equity transaction, Sijia said, “The differences stem primarily from the nature of the underlying assets. From underwriting, to deal structuring, to pricing, to actual execution of a deal, private credit portfolios will necessitate a different approach.”

“There are a lot of similarities in pricing, in thinking and in terms between credit secondaries and equity secondaries, as well as some overlapping in expertise, but also some unique aspects to credit CVs, given the nature of the assets,” Leor added.

Describing the challenges unique to due diligence and valuation in private credit secondaries as opposed to equity secondaries transactions, Leor said,  “We sometimes see portfolios of hundreds of credits and buyers have limited resources for due diligence. The nature of the diligence is very different to a single asset private equity continuation vehicle, where you are essentially doing M&A due diligence.”

“When it comes to due diligence and valuation, credit is going to be more transparent than private equity. For example, a number of the secondary players in private credit are also active on the primary side and may already be invested in some of the borrowers in the portfolio,” Sijia added.

Speaking about the market going forward, Leor said, “We are pretty bullish and excited about secondaries and believe there is a lot of room to run in many asset classes, including credit.”

“The differences between equity and credit secondaries,” Private Debt Investor (May 1, 2026) 

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