2026 Perspectives in Private Equity: Bespoke Liquidity Solutions, Asset-Based Finance and GP-Led Secondary Transactions

This article is part of the “Perspectives in Private Equity” series.

While the exit markets are beginning to show signs of reopening as we move through the first quarter of 2026, GPs dealing with a backlog of unsold assets and the need to return capital to investors are still on the hunt for liquidity solutions.

In recent years, we have seen extended hold periods, rising costs of capital and the need for balance sheet optimization, all of which have transformed the way private equity managers meet investor demands for liquidity. The industry’s characteristic creativity has led to a rapid escalation in the sophistication and mainstream adoption of newer tools including NAV-based financing and GP-led secondaries. We have seen a convergence of private equity, private credit, securitization and fund finance technology, with the removal of historic siloes allowing for a new era of market innovation.

NAV-Based Financing

The ability of private equity funds to borrow money secured against the net asset value (NAV) of their existing investment portfolio, rather than unfunded investor commitments or specific portfolio assets, has grown significantly over the past five years. The trend has clearly been towards the continued use of NAV facilities as a mainstream financing tool rather than a one-off solution, used to both bridge valuation gaps and support struggling assets.

We have seen more and more managers tapping NAV-based lending and the evolution of the market to include both single-asset and multi-asset NAVs tied to some or all assets in a GP’s portfolio. In most cases, proceeds are being utilized to invest capital back into the underlying companies, with a smaller percentage of deals being used as a source of funds for distribution back to LPs.

We are also increasingly observing the use of rated note feeders and collateralized fund obligations (CFOs) as a means to tap insurance capital for funds, operating at the intersection of fund finance, structured finance and asset-based finance. Both allow managers to raise capital by issuing debt to institutions, leveraging underlying fund assets for capital efficiency.

As we move through this year, our expectation is that some of these tools may become less relevant as busier M&A markets offer GPs greater access to liquidity via traditional routes. That said, a more sophisticated multidisciplinary fund finance market is undoubtedly here to stay and we can expect to continue seeing different structures deployed to deliver creative solutions to GPs.

Asset-Based Finance

In the private equity sector, asset-based finance has emerged as another popular tool  to unlock value in companies where managers are not ready to exit. In asset-heavy businesses, the growing availability of private credit in place of traditional bank lenders has opened the door to more opportunities to leverage or monetize those assets as a financing or liquidity tool.

A wide array of cash flow generating assets can collateralize asset-based structured finance, from trade receivables to intellectual property rights and royalties. Although historically securitizations and other asset-backed arrangements have been an afterthought in private equity transactions, we are now seeing it become a key part of financing packages at the point of acquisition. For companies trying to right size balance sheets, securitizations and ABF structures are providing another potential tool in so-called liability management exercises.

Furthermore, we expect to continue to see more origination joint ventures, bringing together private equity investors and asset originators (such as consumer or commercial lenders) to deploy capital into asset-based strategies.

The Global Secondaries Market

The global secondaries market shattered previous records in 2025, with transactional volume reaching $226 billion, surpassing 2024 levels by 41% and crossing the $200 billion threshold for the first time. This expansion reflects sustained demand for liquidity solutions amid persistently tight exit markets and the continued institutionalization of secondaries as a core component of private capital markets.

Continuation fund activity also accelerated sharply, with year‑over‑year growth approaching 70% as both GP‑led and LP‑led transactions continued to scale across asset classes. As investors increased allocations and more sponsors integrated secondaries strategies into their platforms, the market solidified its position as a key liquidity mechanism within private markets.

Secondaries as a Core Liquidity Technology

Secondaries have become a mission‑critical liquidity tool for GPs and LPs, with private equity at the heart of the market. Growth has expanded well beyond traditional buyout strategies into credit, growth equity, infrastructure, real estate and venture capital, reflecting the broadening application of liquidity solutions across private markets.

In 2025, Akin advised Coller Capital on its acquisition of a $1.6 billion senior direct lending portfolio from U.S. insurer American National, one of the largest credit secondaries transactions completed that year, demonstrating the increasing scale and complexity of credit‑focused secondaries activity.

Record Fundraising and Expanding Market Participation

A defining theme of 2025 was record fundraising across secondaries strategies. The industry’s dry powder reached an estimated $315 billion by Q3 2025 – a historic high – fueling buy-side capacity heading into 2026.

LPs are increasing their strategic allocations to secondaries, and a growing number of global asset managers are launching or expanding dedicated secondaries platforms to capture growing demand.

Continuation Vehicles Move Center Stage

The rapid expansion of GP‑led transactions – especially continuation vehicles (CVs) – has cemented CVs as a recognized fourth exit route, alongside traditional M&A, IPOs, and secondary buyouts. By Q3 2025, 16% of all sponsor exit volume was attributed to GP‑led secondaries, underscoring their growing strategic importance.

While illiquidity has historically driven CV demand, their strategic value extends beyond liquidity management. CVs increasingly enable managers to extend ownership of top‑performing assets beyond traditional fund lives, preserving value creation runway and aligning long‑term investor interests.

In July of 2025, Akin advised BlackRock as co-lead in Seven2’s €400 million continuation fund to support two strategic assets, Marlink and Crystal, and finance their development plans.  In September 2025, Akin worked with Apollo S3 as the co‑lead investor in TDR Capital’s continuation vehicle, TDR Capital Titan, formed to acquire majority control of David Lloyd Leisure, one of Europe’s premier fitness club operators. These transactions exemplify how CVs are being deployed around trophy assets with long‑duration growth potential. 

Growing Structural Innovation and Deal Complexity

Secondaries transactions in 2025 continued to evolve with increasing structural sophistication. Innovations such as deferred purchase price mechanisms, earn‑outs and integrated debt financing became standard features in deal structuring, enabling bespoke solutions tailored to both GP and LP requirements.

As the market matures, governance, alignment and transparency are emerging as central themes for CVs. LPs, often constrained by internal bandwidth, are streamlining investment review processes to avoid being forced into sale decisions simply due to timing constraints rather than valuation considerations. This evolution reflects a broader push toward enhanced procedural rigor and portfolio‑level integration of secondaries activity.

The Emergence of CV‑Squared Structures

A notable development in 2025 was the rising use of continuation vehicles on continuation vehicles, commonly referred to as “CV‑squared” transactions. Several such deals were completed during the year, and given the growing sophistication of GP‑led solutions, more CV‑squared structures are expected in 2026 and beyond.

This next generation of GP‑led architecture reflects the market’s comfort with multi‑stage continuation strategies and the ongoing institutionalization of secondaries as a flexible, long‑term asset management tool to be utilized long into the future.