Introduction
Two numbers in Jefferies' review of the 2025 secondary market sit one point apart: limited partner (LP) interests in buyout funds sold at an average of 92% of net asset value (NAV), and interests in private credit funds at 91%. As prices they look interchangeable; as bargains they are not. A credit fund's loans rarely repay more than par and mostly mature within a few years, so a nine-point discount is most of what the buyer earns beyond the loans' yield. A buyout interest carries equity upside above its marks, so its discount is a cushion rather than the whole reward. Venture and growth averaged 78% in the same review and real estate 70%, and fund quality alone explains neither gap.
A strategy label is shorthand for the inputs a buyer prices, and the private capital advisory (PCA) banker selling a mixed portfolio needs to know which input drives each strategy, because that decides which buyers to call and which evidence can move a bid. The mechanics of turning a forecast into a percentage of NAV are set out in pricing LP interests and the discount to NAV; here they are applied strategy by strategy.
What Moves Price From One Strategy to Another
Every interest is priced as a forecast of distributions and calls discounted at the buyer's target return. Strategies differ in how they score on four inputs to that forecast:
- Cash-flow visibility: how confidently the buyer can predict the amount and timing of distributions.
- Duration: how long NAV takes to become cash, which sets how far a change in target return moves price.
- Mark reliability: how the general partner (GP) sets NAV, and how far buyers trust the method.
- Buyer depth: how many bidders have the knowledge, mandate, and capital to price the interest.
| Input | Buyout | Private credit | Infrastructure | Venture and growth |
|---|---|---|---|---|
| What anchors the mark | Calibrated trading multiples | Loan yields and credit quality | Discounted cash flow | The latest financing round |
| Cash while held | Lumpy, from exits | Regular interest | Operating yield plus exits | Little until an exit |
| Where the forecast breaks | Exit timing | Defaults, deferred interest | Discount rate, regulation | Down rounds, a few outcomes |
| Buyer depth | Deep, many generalists | Deepening quickly | Thin specialist pool | Narrow, specialist-led |
| Upside beyond NAV | Equity upside | Capped near par | Moderate | Large but concentrated |
No single row sets the price: infrastructure scores well on visibility and poorly on buyer depth, while venture scores poorly on almost everything except upside. The dated figures by strategy, each tied to its survey and period, are tracked in LP-led pricing trends by strategy.
Buyout and Credit: Near Par for Different Reasons
Buyout Interests as the Reference Point
Buyout interests draw a wide bidder field, because generalist secondaries funds, fund-of-funds, and evergreen vehicles all underwrite them. The marks are also the easiest to test: a buyout GP values each company on calibrated trading multiples applied to reported earnings, so a buyer can rebuild the largest positions company by company. The weak point is exit timing. Distributions arrive only when companies are sold or recapitalized, so buyout pricing moves with the mergers and acquisitions (M&A) cycle and the age of the funds sold more than with doubts about the marks.
Private Credit: When the Discount Does Most of the Work
A direct lending fund's NAV is a book of floating-rate loans marked through a yield analysis of coupon, term, and credit quality, the method covered in how fund NAV is set. Performing loans sit near par, which is also close to the most they can repay, so the buyer earns two things: the cash yield while it holds the loans, and the discount unwinding as they are repaid.
- Pull to Par
The tendency of a performing loan or bond bought below face value to converge toward par as it approaches repayment. In a credit secondary, the buyer earns this gain on top of the cash yield because it bought the fund interest at a discount to NAV.
That is why tight credit pricing still works for buyers. Alfonso Ricciardelli, writing for the CFA Institute in November 2025, described credit secondary buyers targeting low-teens returns, for example an 8% to 10% coupon bought at 90% to 95% of NAV, and the income starts in the first quarter rather than waiting on exits.
Defaults break that arithmetic, and so does payment-in-kind (PIK) interest, which adds interest to principal instead of paying cash and lifts NAV without producing distributions. A Federal Reserve Bank of Boston study from August 2026 found the share of business development company (BDC) loans using PIK rose from about 6% to roughly 10% by early 2026 while reported fair value stayed close to cost, so buyers underwrite cash interest, not accruals. On the demand side, Coller Capital closed a $6.8 billion credit secondaries fund in July 2025, part of a deepening specialist pool. The underlying loans are explained in private credit and direct lending explained.
Infrastructure: Long-Dated Cash Yield and a Thin Buyer Pool
Infrastructure funds own regulated utilities, toll-road concessions in Europe and the US, contracted power, and fiber networks, many paying cash from early in the hold. Where a regulator sets the return, as in how regulated utilities earn on their rate base, operating cash flow is unusually forecastable, and StepStone's March 2025 paper on infrastructure secondaries says discounts are typically tighter because of the assets' stable cash flow profiles.
Duration changes the nature of the disagreement. Infrastructure GPs mostly mark assets with a discounted cash flow, so NAV already embeds the GP's own discount rate, and the secondary discount is largely the gap between that rate and the buyer's target, magnified by how far out the cash runs.
The constraint is the bidder field. The StepStone paper cites an Evercore estimate of about $14 billion of infrastructure-focused secondary dry powder, 7% of the total and less than one year of infrastructure deal volume, and calls the segment a buyers' market. Pricing also splits inside the strategy, between core regulated assets and value-add or energy transition platforms carrying construction and power-price risk.
Venture and Growth: When the Mark Itself Is Uncertain
Why Venture Marks Move in Steps
A venture GP usually anchors each mark to the company's latest financing round, which prices preferred shares with protections common shareholders lack. Will Gornall and Ilya Strebulaev found that across 135 US unicorns, reported post-money valuations averaged 48% above fair value once those terms were priced. Rounds are infrequent, so a mark can sit unchanged for years and then fall in one step.
- Down Round
A financing round in which a startup issues shares at a lower price per share than in its previous round. For a venture fund it usually forces a write-down of that company's mark, which is why secondary buyers discount marks no recent round has tested.
Growth-stage companies with real revenue can be marked on trading multiples and price closer to buyout, while early-stage portfolios rest almost entirely on round prices, a split drawn in growth equity versus private equity versus venture capital.
Concentration, No Yield, and a Narrow Field
A venture interest pays nothing while the buyer waits, distributions depend on an initial public offering (IPO) or sale whose timing nobody controls, and funds hold reserves for follow-on rounds that the buyer must fund at full value. Because a handful of companies usually carry most of the NAV, the buyer underwrites individual outcomes and raises its required return. The field narrows to venture specialists and dispersion is wide: Jefferies found 2025 investor interest in venture GP-leds focused on later-stage companies and themes such as artificial intelligence (AI), and an LP interest holding a sought-after company can likewise clear near NAV while stale early-stage marks clear far below average.
Real Estate and Funds That Defy Their Label
Real estate, at 70% in the Jefferies review, shows two weak inputs combining. Property NAVs rest on appraisals that lag transaction prices, and asset-level mortgage debt means a fall in property values hits the fund's equity NAV harder, so buyers discount marks they expect to be reset; real estate secondaries and fund-of-funds covers the property-specific mechanics.
The label is only a proxy for those inputs. A venture fund whose largest company has just raised a large round and is preparing to list can be priced more like growth equity; a buyout fund carrying 2021 software marks, heavily levered companies, and no visible exits can be priced more like venture. That makes strategy a sorting tool rather than a price. The advisor splits a portfolio by the inputs that drive each fund's value and sends each part to the buyers best equipped to price it, the specialist buyers for credit, infrastructure, venture, and real estate: a seller's proceeds are decided by each fund's own rows, not its strategy's average.
