Private Credit Secondaries Leader Sees Disruption Ahead

In Brief:

Private credit secondaries are experiencing explosive growth as the broader $1.7 trillion private credit market creates unprecedented liquidity demands, with deal flow surging from $5-7 billion five years ago to $36 billion in 2024. Rick Jain, Partner and Global Head of Private Credit at Pantheon, warns that while opportunities abound, the market faces potential disruption from mounting macroeconomic uncertainty and overconfidence in current pricing. Speaking on The Credit Clubhouse podcast, Jain explains how his firm has scaled from managing one fund with $200 million to overseeing nearly $12 billion across 30 vehicles, positioning Pantheon as a leader in the rapidly evolving secondaries ecosystem. His perspective offers critical insight into how liquidity solutions are reshaping private markets as institutional investors and wealth managers seek more flexible capital deployment strategies.

Big Picture Drivers:

• Market Maturation: Private credit has evolved into a $1.7 trillion asset class with over 1,200 managers globally, creating massive secondary opportunities

• Liquidity Demand: DPI challenges from private equity are spilling into credit markets, driving investor need for portfolio rebalancing solutions

• Capital Formation: Continued high single to double-digit growth in private credit is attracting diverse investor types seeking secondary exposure

• Structural Innovation: GP-led continuation funds and portfolio monetizations are creating new liquidity pathways beyond traditional LP interest sales

Key Topics Covered:

• Deal Flow Evolution: How secondary transaction volume has increased sixfold in five years with accelerating momentum through 2025

• Structural Complexity: The challenges of valuing assets within leveraged fund structures compared to direct loan analysis

• Market Positioning: Pantheon's role as an $80 billion private markets specialist spanning equity, infrastructure, and credit secondaries

• Future Outlook: Predictions for market disruption and opportunities arising from current macroeconomic uncertainty

Key Insights:

• Explosive Growth: Private credit secondaries deal flow has surged from $5-7 billion five years ago to $36 billion in 2024, with Pantheon already investing in the first six months of 2025 everything they deployed in all of 2024.

• GP-Led Innovation: The advent of GP liquidity solutions allowing managers to create continuation funds around large portfolios of 25-100 different credits represents a major structural innovation distinct from traditional private equity approaches.

• Valuation Complexity: Analyzing credit secondaries requires understanding not just individual loan quality but complex fund structures including leverage, recycling provisions, and tax implications that make simple asset-by-asset analysis insufficient.

• Market Positioning: Pantheon's scale advantage comes from sitting on thousands of advisory boards across private markets, providing unique information angles and relationships with both GPs and LPs for superior investment selection.

• Public-Private Shift: The trend toward private markets appears irreversible as companies find speed, flexibility, and confidentiality advantages that public markets cannot match, driving continued capital formation.

• Disruption Prediction: Current market conditions feel overpriced with excessive risk-taking, suggesting a negative market event within 12 months that could create attractive investment opportunities for prepared buyers.

Memorable Quotes:

• "It's a little bit like Field of Dreams like if you've built it they will come because now you've created the capability the capital the right cost of capital to facilitate liquidity transactions" - Rick Jain, explaining how dedicated secondaries capital has unlocked market growth

• "The hounds are out. I don't see them coming back" - Rick Jain, on whether the shift from public to private markets will reverse

• "Private credit is private for a reason" - Rick Jain, explaining why complete market transparency and trading remains unlikely

• "Everything's priced for perfection and there's a lot of risk on and not as much risk off" - Rick Jain, describing current market conditions

• "Certainly uncertain" - Rick Jain, summarizing his outlook on macroeconomic conditions and market volatility

The Wrap:

Jain's perspective reveals how private credit secondaries have evolved from a niche solution to a critical component of modern portfolio management, driven by the massive scale and complexity of today's private credit markets. His prediction of impending market disruption, combined with Pantheon's aggressive scaling efforts, suggests the secondaries market may be positioning for both significant opportunity and potential volatility ahead.