Davis Polk partners Sijia Cai and Alisa Waxman were featured in Private Equity International discussing private market relationships and how challenging fundraising conditions along with the growth of secondaries are leading to shifts in the LP-GP dynamic.

When asked about the sustainability of the secondaries market’s current growth trajectory, Sijia said, “Growth in the secondaries market is absolutely sustainable and is even likely to accelerate in the coming years, especially when it comes to GP-led deals. In particular, we have seen tremendous growth in the private credit secondaries market: volume in the first half of 2026 has already matched last year’s full-year total.”

“Sponsors who have not previously been active in secondaries, including venture capital funds, are also now doing [continuation vehicles] (CVs),” Alisa added. “The overall exit market’s slowness, along with sponsors having assets they truly believe in, means they are seeking ways of providing existing investors with liquidity while not selling assets at what they don’t believe to be their true, full value.”

Sijia noted some developments in CV deals, saying, “We have seen a rise in the use of deferrals, earn-outs and other creative structures, such as preferred equity tranches, waterfall revisions and GP subordination, which can help bridge gaps in pricing expectations between sellers and buyers in CV deals. For ‘newer’ asset classes to the secondaries market, such as private credit, we are seeing even more bespoke structuring across the board – here, every CV is structured a little differently depending on the nature of the underlying assets and/or the identity of the seller or the investors coming into the CV.”

Discussing the extent to which capital will continue to concentrate in the largest private markets funds, Alisa said, “It’s a trend that is here to stay. LPs gain comfort from investing with large, familiar sponsors with a long track record and the benefits of scale.”

Sijia added, “When you talk to LPs, most agree that some of the best opportunities to generate out-sized returns lie in the mid-market. Yet when LPs write checks, it is riskier for them to invest in a smaller fund managed by a less well-known manager. So, for the smaller funds that do get raised, it is about track record and having a genuinely differentiated strategy.”

Offering advice to women early in their private funds advisory careers, Alisa said, “Say yes to every opportunity. There’s a lot to learn, soak it all up and ask for stretch assignments because this is a practice area where you can be given substantive work at an early age.”

“I would also say that the private funds community is a very welcoming space,” Sijia emphasized. “Secondaries, especially, is quite small – even now – so you keep running into the same people and that really helps with what is very much a relationship-driven business.”

“Private market relationships take new shape,” Private Equity International (October 2026)

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