Accessing unique private equity opportunities in the small and middle market

Secondaries: Providing liquidity in a distribution deprived market

The global secondary market is experiencing record activity, with 2025 volume reaching $226 billion – a 41% increase over 2024. This surge is driven by LPs seeking liquidity as traditional exit channels remain subdued, as evidenced by a 10-year low in the ratio of distributions to beginning net asset value (NAV) in 2024.¹ This trend is particularly evident among large and mega funds, whose liquidity profiles are more closely tied to the IPO market and broader exit activity.

Given the recent trends of declining distributions and extended holding periods for private investments, LPs are increasingly turning to the secondary market to accelerate liquidity—even as capital calls remain steady. At the same time, GPs are embracing continuation vehicles (CVs) to hold their best assets longer, seeking to maximize value while offering existing investors an option of liquidity. Nearly 75% of the 50 largest global private equity firms have utilized CVs, underscoring their growing role and widespread adoption in private markets.¹

Co-investments and staples: Creative capital solutions

The distribution drought has also resulted in a reduction in the amount of capital raised by private equity firms and an increase in the amount of time it takes to raise a new fund.² In this challenging fundraising environment, investors with flexible capital – like the J.P. Morgan Asset Management Private Equity Group (PEG) – are well positioned to provide creative solutions such as co-investments or stapled transactions, which combine a co-investment or secondary with a primary commitment to a seasoned fund with existing holdings. These mutually beneficial arrangements offer GPs fresh capital, while investors gain enhanced visibility and targeted exposure to high-quality assets with preferential economics, since co-investments typically come without the additional layer of fees that often accompany fund commitments.

PEG’s disciplined and proactive approach, refined over 45 years³ of managing private equity investments on behalf of institutional and individual investors, enables the Group to navigate market cycles and capitalize on market dislocations.³ With a dedicated team of 74 professionals and access to the broader resources of one of the world’s largest financial institutions, PEG mines its network of over 260 GP relationships to identify and structure innovative transactions with attractive risk-return characteristics – such as co-investments and staples – that meet the evolving needs of both LPs and GPs.⁴

Small and middle-market focus: Attractive opportunity set in an era of capital consolidation

While large funds and mega deals dominate headlines and inflows, the overlooked small and mid-market private equity space presents a compelling relative value proposition. Defined as less than $5 billion in fund size and less than $3 billion in enterprise value, these deals often trade at attractive valuations with lower leverage levels and offer the ability to sell upstream to a broad universe of well-funded large buyout funds and strategic buyers. As capital continues to consolidate at the top end, nimble mid-market investors encounter less competition for companies that are often owned by founders or families. These businesses benefit from the expertise and value-added resources that skilled private equity managers employ to transform small companies into scaled, diversified, professionally managed enterprises that attract a broad array of potential buyers at exit. PEG’s focus on the small and middle-market is a differentiated approach that enables investors to capitalize on the unique opportunities within this segment.