Introduction
Dry powder is a stock: the uncalled money in buyers' funds on one date. The secondary market runs on flows: closed-end fundraising, monthly evergreen subscriptions, recycled proceeds and borrowing come in while record deal volume goes out. Evercore's private capital advisory (PCA) team put secondary dry powder at about $215 billion at the end of 2025, roughly one year of transaction volume. That snapshot covers only part of what buyers can spend, which is why respected surveys publish figures more than $100 billion apart for the same date. The working concept for an advisor preparing a sale is buyer capacity: what is available, who holds it, and how fast it refills.
The Components of Secondary Buyer Capacity
Buyer capacity is the money that could pay for fund interests sold by limited partners (LPs) and continuation vehicle (CV) stakes over the next year or so. Its core is closed-end dedicated dry powder, but several other sources sit beside it.
- Dry Powder (Secondaries)
Committed but uncalled capital in funds raised to buy secondary interests, available for new purchases until each fund's investment period ends. It excludes money still being raised, borrowing, and capital from investors outside the dedicated funds.
The fastest-growing addition is evergreen capital: semi-liquid vehicles, many registered under the Investment Company Act of 1940 ('40 Act), whose buying power is each month's new money less what investors ask to redeem. That capacity is a flow and can reverse within a quarter, as evergreen and '40 Act secondaries vehicles explains.
| Component | What it is | How the surveys treat it |
|---|---|---|
| Closed-end dry powder | Uncalled commitments in dedicated funds | Core of every figure |
| Near-term fundraising | Funds in market, not yet closed | Added by Jefferies; a separate target at Evercore |
| Evergreen inflows | Subscriptions net of redemptions | Retail fundraising in Jefferies' figure |
| Co-investment and overflow | LP capital alongside a lead | Evercore's overhang adds LP co-investors |
| Separately managed accounts | One investor's mandate | Rarely shown separately |
| Non-traditional buyers | Pensions, sovereigns, insurers buying directly | In Jefferies' total, outside Evercore's dry powder |
| Leverage and recycling | Borrowing and reinvested proceeds | Estimated, not measured; deferrals excluded |
Leverage and seller deferrals stretch the equity behind each bid rather than adding equity; leverage in secondaries shows how both raise a bid and add risk.
Why Published Dry Powder Figures Disagree
Three published end-2025 figures measure different pools. Evercore's 2025 secondary market report counts uncalled committed capital, William Blair's 2026 secondary market report the dry powder of specialist secondary investors, and Jefferies' 2025 secondary market review dedicated available capital plus a wider total.
| Source, end-2025 | Headline figure | What it counts |
|---|---|---|
| Evercore | About $215 billion of dry powder | Uncalled committed capital |
| William Blair | $248 billion of dry powder | Specialist secondary investors' capital |
| Jefferies | $327 billion dedicated; about $477 billion total | Dry powder plus near-term fundraising and estimated leverage; total adds traditional LP capital |
Dedicated Capital Versus Total Capital
Jefferies estimates near-term leverage at 15% of equity dry powder plus current fundraising, and its mid-2026 breakdown shows the reach: of $290 billion at the end of the first half of 2026, $143 billion was equity dry powder, $109 billion near-term closed-end and retail fundraising, and $38 billion leverage. Less than half the headline was money already committed. Evercore counts that narrower kind of money, the uncalled commitments found in any closed-end fund, so its figure sits well below Jefferies'.
Point in Time
Dry powder is a balance, so the reporting date matters. Jefferies' dedicated capital fell from $327 billion at year-end 2025 to $290 billion six months later, and Evercore's dry powder from about $215 billion to about $194 billion, as deployment outran fundraising. The latest dated readings sit in where the secondaries market stands.
The Capital Wall: Overhang Measured in Years of Volume
The capital wall sets buyer capital against annual deal flow to show how many years of transactions buyers could fund at the current pace without raising more:
On Jefferies' basis, dedicated capital over volume, the multiple fell from 3.1x in 2020, when volume dropped to about $60 billion, to 1.4x at the end of 2025 and 1.2x by mid-2026, according to its July 2026 secondary market review. Evercore's capital overhang, which adds estimated leverage, recycling and LP co-investors to its own narrower dry powder figure and divides by its own volume estimate, gave about 1.2x for both LP-led and general partner (GP)-led deals at the end of 2025, so the two multiples are not directly comparable.
- Capital Overhang Multiple
The ratio of capital available for secondary transactions to the last twelve months of transaction volume, read as the years of deals buyers could fund at the current pace. Its value depends on what the numerator includes, from dry powder alone to dry powder plus fundraising, leverage and co-investment.
The ratio matters for pricing because it signals who needs whom. A high multiple means many buyers chasing few deals, which compresses discounts; a low one lets buyers choose, so weaker assets clear lower.
Why the Ratio Can Mislead
Yet Jefferies put average LP portfolio pricing at 87% of net asset value (NAV) in the first half of 2026, unchanged, while its multiple reached 1.2x. Three distortions explain much of the gap:
- Deployment speed: a fund spending in two years rather than four shows a small stock but a large flow.
- Pacing across vintages: the aggregate mixes a flagship that has just closed with third-year funds that are mostly spent.
- Concentration in top buyers: Evercore found roughly ten buyers with $5 billion or more each held about 53% of dry powder at the end of 2025.
Concentration means a large portfolio faces a shorter list than the total implies, as the secondaries buyer universe shows by name. And the ratio divides a stock by a flow without asking how fast the stock refills.
How Secondaries Fundraising Refills the Wall
William Blair counted a record $95 billion raised by secondary funds in 2025, lifting secondary fundraising to about 10% of all private capital raised, from 3% in 2021. Flagship funds grow because portfolio sales and CVs keep getting larger and LPs trimming manager lists favour long records, the same concentration traced in first-time funds and the 2025 fundraising squeeze. First-time and specialist funds add capacity where flagships are thin: small deals, credit, infrastructure and venture.
Deployment speed sets the rhythm. A fund that commits its capital well inside its investment period returns to market early, so successor raises overlap with active buying, a sequence the fund lifecycle explains. Between raises, recycling puts early distributions back to work.
- Recycling (Private Equity Funds)
A partnership agreement provision that lets a fund reinvest capital returned from earlier investments, usually up to a cap and within a set period, instead of distributing it. For secondaries buyers it adds buying power without new commitments, because mature purchases return cash early.
Evercore's respondents also set a next-twelve-month fundraising target of about $218 billion, up 89% year over year.
What the Advisor Does With Buyer Capacity
Before launch, the advisor reads capacity buyer by buyer, and the answers shape the invitation list and timetable in the LP portfolio sale process:
- Which funds have closed recently, and how much each has deployed.
- Which evergreen vehicles show net inflows, and which face rising repurchases.
- Which bidders depend on committed financing or a fund still in market.
Launch timing follows. A sale soon after several flagships close meets buyers with fresh commitments and pacing targets, the best conditions for tight pricing. One launched as those funds near the end of their investment periods meets two behaviours that look alike on a bid sheet: buyers rationing their last dollars, and buyers stretching to finish deployment before a successor raise. Separating them is part of reading the bids; dated expectations are tracked in the secondaries market outlook.
Every capacity figure here was published by an advisory firm that earns fees when sellers come to market, estimated partly from surveys of buyers who want to appear active. That does not make the numbers wrong. It is why the definition and the date matter: they are the only parts of a capacity estimate a reader can check.
