NextFin News - Jefferies is targeting €1 billion for a new private credit secondaries fund, a move that places the investment bank among a growing pack of managers racing to build dedicated capital for buying and restructuring existing private-loan portfolios rather than originating new ones.
The fund, announced Aug. 19, 2026, is a bet that the private credit market has matured to the point where secondaries — the purchase of existing loan and fund stakes from other investors — will move from a niche liquidity tool to a permanent fixture of the asset class. Jefferies joins a field that has thickened quickly: Ares Management raised $7.1 billion for its credit secondaries strategy in July 2026, and Coller Capital closed a $5.8 billion private credit secondaries fund in July 2025. The target size is modest beside those, but the timing is the point: the market for buying and selling private credit stakes is growing faster than almost any other corner of private markets.
Transaction volume in private credit secondaries rose from $6 billion in 2023 to $10 billion in 2024 and is expected to exceed $17 billion in 2025, a compound annual growth rate above 70% since 2023, according to Jefferies' own market research. Evercore's 2025 Credit Secondary Market Survey put 2025 volume at roughly $20 billion, nearly double the $10.9 billion recorded in 2024. By comparison, private equity secondaries — the much older sibling — still dwarfs the credit market, with annual volumes above $160 billion. The gap is the opportunity.
What exactly is being traded? Credit secondaries come in two forms. In an LP-led deal, a pension fund, insurer, or other allocator sells its stake in a private credit fund — usually at a discount to net asset value — to raise cash or rebalance its portfolio. In a GP-led deal, the fund manager itself initiates the transaction, typically by moving assets into a continuation vehicle that lets some investors cash out while others roll their exposure forward. Both solve the same problem: private credit loans do not trade on an exchange, and funds have fixed lives, so investors need a door before the last borrower repays.
The question the announcement raises is whether this is a cyclical liquidity wave that will recede when exit markets reopen, or a structural regime shift in how private credit is owned, managed, and exited. The evidence points to structural — with a cyclical tailwind on top.
Why Credit Secondaries Is No Longer a Niche
The mechanism is straightforward and self-reinforcing. Private credit funds have typical lives of five to seven years. The asset class has been expanding for more than a decade, which means a growing stock of fully drawn funds is now reaching the stage where managers must return capital to investors. Natural run-off — waiting for borrowers to repay — is too slow. Mergers and acquisitions and IPO exits have been muted. Secondaries have become the pressure-release valve.
That shift is visible in the composition of deal flow. In 2025, GP-led transactions — continuation vehicles and portfolio sales initiated by the fund manager — reached $12 billion, up 202% year over year and overtaking LP-led sales of $8 billion, according to Evercore's survey. GP-led deals let managers return capital to existing investors while keeping assets under management; for LPs, they offer liquidity without forcing a fire sale. The tool has moved from exceptional to routine.
Pricing tells the same story. When the market was thin, sellers accepted steep discounts. Today, GP-led direct-lending portfolios price between 95% and 100% of par, Jefferies' research found, and Evercore estimated the average gross purchase price at 98% of par in 2025. The penalty for seeking liquidity has largely disappeared — which means more LPs are willing to use the market, which deepens liquidity further, which compresses discounts further. That is a structural feedback loop, not a temporary dislocation.
"In many ways, private credit secondaries are situated where the much larger private equity secondaries market was approximately five or so years ago," Jefferies wrote in its credit secondaries research.
The analogy is precise. Private equity secondaries spent years as a distressed-asset graveyard before becoming a core institutional allocation. Credit secondaries are on the same path, only steeper: Jefferies projects the market could reach more than $40 billion annually by 2027, and the firm estimates dedicated dry powder in the strategy already exceeds $20 billion. Across the broader secondaries market, available capital reached roughly $194 billion entering the second half of 2026, per Jefferies' mid-year review.
The transmission channel from rate cycle to deal flow is direct. Higher-for-longer interest rates kept borrowers from refinancing and kept sponsors from selling portfolio companies. That trapped capital inside credit funds. As loans mature and covenants trip, the assets must be repriced or moved — and a continuation vehicle lets a GP do that without admitting distress. The secondaries market is where the private credit cycle becomes visible, because it is where assets change hands at marks that real buyers and sellers have agreed to, rather than marks that models have produced.
There is a second transmission channel that most investors miss: the mark-to-model problem itself. Private credit portfolios are valued quarterly by managers, not by the market. A secondary transaction is one of the few moments when an outside buyer puts a real bid on a pool of loans. For LPs sitting on years of smooth, model-derived NAVs, that external validation — even at a slight discount — is valuable information. It lets them mark their books, satisfy internal risk committees, and reallocate. The secondaries market, in other words, is not just a liquidity venue; it is the price-discovery layer the primary market never built.
The Capital Race: Jefferies Enters a Crowded Room
Against that backdrop, a €1 billion target looks conservative. Ares' $7.1 billion raise — including roughly $4 billion of LP equity commitments for its inaugural Ares Credit Secondaries Fund, double its $2 billion target — and Coller's $5.8 billion fund set a high bar. Other managers, including CVC, LGT Capital Partners, and HarbourVest, have launched or expanded credit secondaries strategies in the past year, and Blackstone's Strategic Partners unit has been exploring a dedicated entry into the space. Jefferies is not trying to win on size.
Its edge is different. Jefferies already operates a private credit asset-management platform, Jefferies Credit Partners, which manages roughly $25 billion of assets, and a private capital advisory business that advises on secondary transactions across Europe and beyond. Job postings for the firm's EMEA private credit secondaries platform describe "continued growth" of the team. That gives the bank two revenue channels from the same market: advisory fees on transactions and management fees on committed capital. More importantly, an advisory desk sees deal flow before anyone else — an information advantage when pricing a portfolio of private loans that rarely trades on a public exchange.
The second-order implication is what makes the fund strategically rational even at a smaller size. The €1 billion is not primarily a return-maximization play; it is a positioning play. A dedicated fund converts Jefferies' advisory market intelligence into a balance-sheet-adjacent capability, lets the firm co-invest alongside deals it sees through the advisory channel, and establishes a track record ahead of a market Jefferies itself forecasts will more than double by 2027. In a market where pricing is opaque and relationships determine access, being an early institutional owner matters more than being the largest.
There is also a supply-side logic. More than 80% of investors in the credit secondaries space are raising capital, according to Evercore's survey. Capital formation is outpacing even the rapid growth in deal supply — a sign that allocators see the strategy as underpenetrated rather than crowded. For Jefferies, raising €1 billion in that environment is a test of distribution, not of thesis.
Europe adds a geographic dimension to the timing. The region has become a defining force in GP-led secondaries, set to account for up to 30% of all GP-led secondary activity in 2026, according to Jefferies' research on the European market. A 2026 survey of private equity managers found that 43% of EMEA respondents plan to increase their use of GP-led secondaries over the next 24 months, up from 14% a year earlier — a clear signal that adoption still has room to run. A euro-denominated fund positioned in that market gives Jefferies a currency-matched vehicle for European LPs who would otherwise face hedging friction buying a dollar fund.
Cyclical Liquidity or Structural Regime?
The strongest case against the structural read is also the simplest: much of today's secondaries supply is cyclical. Muted M&A, a narrow IPO window, and a refinancing wall are products of the rate cycle, not permanent features. If exit doors reopen and credit spreads tighten, LPs may choose to hold rather than sell, GP-led urgency may fade, and the flow of assets that makes secondaries economics work could thin out. A cyclical view holds that the market is enjoying a temporary liquidity premium that will mean-revert once the macro backdrop normalizes.
That argument is credible but incomplete. It explains the amplitude of the current wave, not its existence. Three structural forces will persist regardless of the cycle. First, the primary market is now measured in trillions of dollars, and its funds have finite lives — the stock of maturing assets grows mechanically. Second, continuation vehicles have been normalized as a portfolio-management tool; 43% of EMEA private equity managers plan to increase their use of GP-led secondaries over the next 24 months, up from 14% a year earlier, according to Jefferies' research. Once GPs build secondaries into their standard toolkit, they do not unbuild it. Third, dedicated capital remains scarce relative to the primary stock: more than $20 billion of dry powder sounds large until measured against a primary market where a single large manager can raise more than that alone.
The verdict: structural with a cyclical overlay. The volume spike is cyclical in amplitude; the mechanism — secondaries as a core exit and liquidity channel for a maturing asset class — is structural and will not revert on its own. Getting this wrong flips the conclusion. If the move were purely cyclical, today's entrants would be buying the top of a liquidity cycle. If structural, they are buying early access to a market that is only now being invented.
The counter-thesis has one clear falsifying signal. If annual private credit secondaries volume stalls below roughly $25 billion through 2026 and 2027 — well short of the $40 billion-plus trajectory — or if GP-led pricing falls back below 90% of par for two consecutive quarters, the structural-growth thesis is wrong and the cyclical view wins. Either would signal that today's supply is a rate-cycle artifact rather than a durable regime.
What Comes Next
In the short term, expect fundraising competition and some pricing compression as the new wave of dedicated capital — Ares, Coller, CVC, LGT, HarbourVest, and now Jefferies — chases a finite pool of assets. LPs selling credit stakes will benefit from the competition; first-time or smaller credit-secondaries funds without advisory platforms may struggle to source competitively priced deals. For Jefferies specifically, the test is whether it can convert advisory relationships into committed capital quickly enough that the fund is not left deploying into a market where the best assets are already claimed.
Over the medium term, the flow of maturing funds should keep volume rising even if the rate cycle turns. Over the long term, credit secondaries is likely to become a standard sleeve in institutional private-markets portfolios, the way private equity secondaries did — smaller in absolute terms, but permanent.
Scenarios: the base case is that Jefferies reaches its €1 billion target and the market approaches $40 billion annually by 2027. The upside case is a credit-stress episode that forces asset sales and accelerates volume beyond that path — the paradox of the secondaries market is that distress feeds it. The downside case is a pricing collapse that leaves the newest funds holding overpriced portfolios and dry powder stranded, a replay of the early private equity secondaries years when naive buyers paid full price for assets that needed work.
The €1 billion Jefferies is chasing is not the story. It is the price of admission to a market that exists only because the private credit boom has grown old enough to need an exit door — and every manager with a balance sheet and a client list is now trying to buy a ticket.
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