What’s Happening in Private Markets Right Now

Many investors with private market exposure are asking the same question: are my private investments really worth what they’re marked at, and why aren’t they moving the way my public portfolio is? The answer is straightforward: this is exactly how private markets are designed to work. Private markets today are not frozen, they’re repricing.

Public investments reprice every day, visibly. Private investments reprice through transactions, on a longer cycle. The gap investors notice right now, public portfolios climbing while private marks appear static, is a normal structural feature, not a signal of concern. For ultra-high-net-worth portfolios, where private market allocations often range from 30% to 60%, this dynamic is particularly relevant, making liquidity management a central consideration rather than a secondary one. Understanding what’s actually happening beneath the surface reveals a more dynamic environment than the surface suggests.

The Valuation Gap in Private Market Investments

Public equities rebounded quickly after 2022 as multiples stabilized, earnings held, and sentiment recovered. By design, private markets didn’t reprice at the same speed. Due to fewer transactions clearing, price discovery is taking longer, and GPs tend to smooth short-term volatility rather than mark an incomplete picture.

As public markets rallied from 2023 to 2025, it set the stage for a gradual reset in private valuations. That reset is now occurring through real transactions rather than financial models, which rely on periodic, assumption-driven estimates based on comparable companies, prior transactions, and projected cash flows.

The Denominator Effect

When public markets fell in 2022, private allocations appeared to rise as a percentage of the total portfolio value, a related dynamic that affected many portfolios. It was not due to new investments, but rather to a shrinking total portfolio value. Since then, public markets have recovered strongly, and the denominator effect is naturally reversing.

Investor Example
Consider a $100M portfolio split between $60M in public assets and $40M in private market investments. After a 25% public markets drawdown, public assets fell to $45M, while private marks held at $40M. The private allocation rose from 40% to 47%, purely mechanical, requiring no portfolio action. As public markets recovered and the denominator grew, the private allocations normalized on their own.

For investors with available capital, this normalization is also creating room to deploy into private markets at a point where entry conditions compare favorably to recent peak vintages

Secondaries: Turning The Dynamic Into Opportunity
An investor acquires a secondary interest at 80 cents on the dollar, not because of weakening fundamentals, but because of the seller’s near-term liquidity need. The buyer may gain access to a seasoned portfolio at a discount, with the potential for additional time for underlying companies to mature, depending on the structure and timing of the transaction.

What Happens Next for Private Market Investments

Valuation gaps close through transactions, not valuation models. When companies need capital or investors need liquidity, assets trade and establish real market-clearing prices. Four mechanisms are currently driving this repricing, each one a potential entry point for well-positioned investors.

Down Rounds
A private company raises new capital at a lower valuation than its previous round, typically driven by slower-than-expected growth or revised profitability targets. Companies requiring capital may accept an adjusted valuation to secure funding, which resets the pricing baseline for the asset. While existing investors may face some dilution, down rounds re-anchor valuations to current fundamentals and often signal broader repricing across comparable assets. This creates a cleaner entry point for incoming investors.

Structured Equity
New capital can be raised without explicitly changing the headline value, provided meaningful investor protections are in place. Protections can include preferred shares, liquidation preferences, or ratchets. This type of repricing occurs economically rather than nominally. In uncertain environments, investors can negotiate increased downside protection that wasn’t available during the peak cycle. Structured equity is a quieter form of repricing, but no less meaningful in practice.

Continuation Vehicles
When assets are transferred from an older fund into a new vehicle, they attract new investors at updated pricing. These transactions are structured to reflect current market conditions, including discounts or revised terms. Existing investors receive the option of partial liquidity or continued exposure. Continuation vehicles have grown significantly as traditional exit routes via M&A or IPO remain constrained, allowing GPs to extend hold periods for high-conviction assets rather than being forced to exit at suboptimal valuations.

Secondaries
Investors sell existing fund interests or direct assets to new buyers at real, executable prices. The secondary market serves as the most direct mechanism for price discovery in private markets, establishing market-clearing valuations, enabling portfolio rebalancing, and providing liquidity independent of public market movements. For buyers, it creates access to seasoned assets at transaction-based pricing rather than peak-cycle valuations.

Liquidity Is Returning, Just Differently

In 2026, liquidity events haven’t disappeared, they’ve just changed. Traditional exits such as IPOs and M&A remain part of the picture, but timelines have lengthened and a more sophisticated and resilient ecosystem has emerged, enabling capital to move without relying on public market windows.

Secondary Market Growth
Secondary market volume has grown substantially as LPs facing overallocation, slower distributions, or near-term capital needs transact directly with one another. Liquidity is happening investor-to-investor rather than company-to-market, establishing real transaction-based pricing in the process. For buyers, the secondary market may offer a clear way to access high-quality private assets at reset valuations. It sometimes offers a shorter effective holding period than a traditional primary investment.

GP-Led Continuation Funds
When a GP transfers high-conviction assets into a new vehicle, it creates a structured liquidity event within the private markets. Existing investors can choose to sell at the updated pricing, while new investors gain access to assets that have already moved beyond the early development stage. GP-led continuation funds are becoming more common as GPs balance exit timing with fund life constraints. For investors, they represent a growing, increasingly important entry channel into private markets.

Private Credit Replacing Venture Capital
Companies are turning to private credit to fund operations and growth, rather than raising new equity at a lower valuation. With private credit, founders avoid dilution, and existing equity holders avoid a down round. It creates a compelling entry for investors into senior secured private credit, with yields, covenant protections, and structural seniority that traditional equity doesn’t offer. The deal flow is expanding as credit is increasingly filling the role that equity once played.

Repositioning Private Market Investments for the Next Cycle

Maintain Patient Capital
In this environment, the advantage lies with investors who can provide liquidity to constrained sellers. Investors can acquire high-quality assets at discounted valuations, typically 5–30%+ below prior marks, depending on the asset itself and the seller’s urgency. The discount helps compensate for longer holding periods and limited liquidity, while also providing access to assets that were not available at these prices during the 2020–2021 cycle.

Focus on Companies That Need Capital, Not Exits

Capital scarcity gives investors genuine pricing power. Rather than waiting for exit conditions to improve, the opportunity is to act as the capital solution, structuring investments with preferred terms, downside protection, and alignment between risk and return. While exit markets remain uncertain and time-dependent, the ability to define terms at entry is available today.

Lean Into Secondaries, With Discipline

Secondaries can provide one of the most effective access points to discounted private market investments, but they require disciplined execution. This requires rigorous underwriting to current, not historical, values, careful assessment of the seller’s motivation, and access to quality deal flow. Motivated sellers may hold information advantages; so managers’ due diligence and strong network quality are non-negotiable.

In 2026, private market investments are repricing in a constructive, disciplined manner. Reduced competition, stronger structuring terms, and more attractive secondary pricing are creating entry conditions that compare favorably to recent peak vintages.

For investors with patient capital, this is a shift from a momentum-driven market to one where selectivity and pricing discipline matter. The opportunity is not simply about gaining access, but about deploying capital with intention alongside the right partners and taking advantage of what the current cycle has to offer.

This environment rewards investors who are patient, selective, and disciplined.