The $240bn problem hiding in your fund accounting
The secondary market hit $240bn in transaction volume in 2025. A 48% year-on-year increase. The largest year on record. Every GP in private markets has seen some version of that headline.
Most have filed it under dealmaking trends. That is the wrong drawer.
What the growth figures describe is a fundamental rewiring of how assets move, how ownership is structured, and how capital is recycled across vehicles. The operational consequences of that rewiring are arriving now, quietly, inside the systems that firms already rely on.
The continuation vehicle problem
GP-led secondaries reached $115bn in 2025, up 53% year-on-year. Continuation vehicles now represent a significant share of that activity, and nearly 80% of the top 100 sponsors have completed at least one CV transaction. This is no longer an edge case. It is standard practice for the most sophisticated operators in the market.
A continuation vehicle sounds like a financing decision. In practice, it is an operational event of the first order.
When an asset transfers into a CV, it does not arrive clean. It arrives carrying its full history: the entry valuation from the original fund, the existing investor cohort, the accumulated carry and waterfall mechanics, and the reporting obligations that come with both. The new vehicle layers its own economics on top. New investors come in at a different entry point. Existing investors may roll, exit, or split. The same asset now sits inside two structures simultaneously, with different cost bases, different reporting timelines, and different waterfall calculations that must never be confused.
Most fund accounting systems were not built for this. They were built on the assumption that a fund has a beginning, a middle, and an end, and that assets move through it in sequence. A continuation vehicle breaks that assumption on day one.
The compounding effect
The problem does not stop at secondaries. The same structural shift is emerging through the rapid growth of evergreen and open-ended fund structures, where capital is continuously raised, deployed, and reallocated rather than following a defined lifecycle.
In an evergreen structure, there is no natural exit event that resets the clock. Capital enters at different points, earns returns based on entry date, and exits on terms that must be calculated individually for each investor. Valuations must be applied consistently across cohorts that have never shared the same economic starting point. Reporting must reconcile all of this in real time, not at a quarterly close.
Add secondaries to an evergreen programme and you have a structure where ownership, valuation, and capital movement are all changing simultaneously, at pace, without the fixed timeline that traditional fund accounting relies on to bring order to the process.
The traditional operating model assumed you could sequence these events. The modern one does not give you that option.
What this exposes
The question firms should be asking is not whether their deal teams can execute in this environment. Most can. The question is whether their operational infrastructure can support what the deal team produces.
Specifically: can your system hold the same asset in two structures with different cost bases and produce clean, auditable numbers for both? Can it apply valuations consistently across investor cohorts that entered at different points and under different terms? Can it reconcile ownership across a secondary transfer without manual intervention? Can it produce LP reporting that accurately reflects all of this, on time, without rebuilding the logic from scratch each quarter?
For firms running on legacy platforms or Excel-dependent workflows, the honest answer is: not reliably. And in private markets, "not reliably" is not a process inefficiency. It is a risk.
The operational reckoning
Secondary market volume is forecast to approach $300bn annually within the next 12 to 24 months. Continuation vehicles will account for a growing share of sponsor-backed exits, currently around 14% of all activity. Evergreen structures will continue to attract capital from LPs who want exposure to private markets without the illiquidity constraints of a traditional fund.
This is not a temporary condition. The direction of travel in private markets is toward more structural complexity, more overlapping ownership, and more continuous capital movement. The firms building for that future now will not be the ones scrambling to reconcile it later.
The secondary market boom is a dealmaking story only if you stop reading before the operational consequences arrive. Most infrastructure was built for a market that no longer exists. The firms still running on it are accumulating a debt they have not yet been asked to repay.
The question is when, not if.
Ready to see how LemonEdge handles it?
LemonEdge is purpose-built for the complexity that modern private markets structures demand. From continuation vehicles to evergreen funds, our platform gives your team the clarity, consistency, and control to stay ahead.
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