Davis Polk partner and Investment Management practice head Leor Landa was featured on Secondaries Investor’s Second Thoughts podcast discussing how GP-led transactions have rapidly grown into a mainstream liquidity and portfolio-management tool, the rising LP demand for liquidity, and increasing GP comfort with continuation vehicles.

Discussing the growth of GP-led deals, Leor said, “I think there is this persistent but false myth out there that the reason we are seeing such growth is that there is a lack of liquidity in the market. I think there is a turbo boost happening right now because there is a broader lack of liquidity in the IPO and M&A markets. Just thinking about our practice over the years and the market … 2024 was one of the worst M&A and one of the worst IPO markets in the last quarter century. It was our best ever for secondaries at the firm, and I think the best ever in the market. You could say OK well, a lack of liquidity leads to secondary activity, but before that our best ever year was 2021, which was by far the best year for M&A and by far the best year for IPOs in the last quarter century. So, there’s a little bit of like a non-correlation aspect. I think people assume that there’s a correlation but I’m not sure there is.”

He continued, adding, “In 2012, GP-led deals were roughly 0%. We were just inventing it back then. That growth from a zero-dollar market to a $50 billion+ market – and I think it’ll be much more than that this year – that happened mostly over the course of the 10-year boom in M&A. And I think the reason is that there are secular reasons to do a GP-led just like there are reasons for particular portfolio companies to do a strategic M&A transaction or to sell to a sponsor or to sell to the public. There are just deals where it makes sense to do GP-led.”

The host, Adam Le, stated that about 16% of all exits globally this year have been done via continuation vehicles. Leor noted that this percentage is partially due to lower M&A activity. “When M&A activity comes back – and we’re already starting to see green shoots both in M&A and in IPO activity – I don’t anticipate it slowing down on absolute dollar volume on GP-leds. I think it will continue to grow, and if anything, I think it’s capital constrained right now. But it wouldn’t surprise me though to see the percentage start to turn back.”

Noting how much more room there is for the market to expand, Leor said, “The market is constrained both in capital and in human resources. I think there aren’t enough buyers and there aren’t enough advisors. There are more deals than there is capital. … It still feels like we’re in the early innings here. There is a lot of room. We could easily double or triple the size of this market over the next few years. It does not feel like we’re close to the end here.”

Speaking about what is happening at the mega-cap end of the market, he pointed out, “At the end of last year, we had north of $200 billion of dry powder. I think now that’s shrunk a bit because so much capital has been deployed, so it’s probably about $175 billion of dry powder. The shocking thing is, I saw in one stat, probably about half of that exists just in the top eight buyers. So, there’s a pretty concentrated capital pool out there for deployment. The funds that they are raising are getting bigger and bigger, and so the check sizes that they’re looking to write are getting bigger and bigger.”

When asked about the impact of the influx of buy-side capital on the market, Leor said, “I think this actually makes the impact a little bit more diffuse, but the ones I’ve seen – and we have seen a lot this year – they tend to be specialized. We’ve been seeing credit shops opening up a secondaries arm or traditional LP-side investors moving into GP-leds and launching businesses around that. We’ve seen in credit, we seen it in infrastructure, we’ve seen it in single-asset GP-leds, that’s where we’ve seen people going out to raise money. So, it’s really much more targeted than just raising the next big secondary fund.”

While speaking on the importance of transparency in secondaries deals, he noted, “It’s one of the areas where business risk and legal risk line up really well. By being transparent, you de-risk executing the deal on the business side. You have a better sense of what your sale volume is and what your clearing price is. You get a lot of information along the way, and you really increase the likelihood of getting the deal through. So, it’s great for business execution de-risking, and it has the wonderful effect of also de-risking on the legal side.” 

Looking forward to 2026, Leor noted, “This thing is growing. We are still in the early stages. The penetration is still very, very shallow. … If you look at credit for example, we were stuck at $3 to $5 billion of secondaries volume year after year and suddenly it jumped to $9 billion. Now this year we’re expecting to hit probably $20 billion. We’ve done $1 billion+ portfolios already this year. It will easily hit $20 billion. That’s on a rocket ship to $50 billion+ in the next couple of years.”

He added, “Acceptance is growing, and we’re very, very bullish on the secondaries market. And not just in the next 12 months but in the next 12 years.”

“The new era of GP-led secondaries,” Second Thoughts (December 1, 2025)

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