Netley Capital Raises Fresh Dry Powder for Secondaries Push

Netley Capital just raised fresh commitments for its secondaries platform — and the timing says everything about where private markets are headed in 2026. The London-based investment firm announced Tuesday it's secured additional capital for what it calls its "tertiaries franchise," a specialized corner of the secondaries market that's become one of the fastest-growing segments in private equity as GPs hunt for creative exit routes and LPs look to rebalance portfolios without waiting for traditional liquidity events.

The firm didn't disclose the dollar amount — classic secondaries opacity — but confirmed the fresh commitments will fund "strong deal flow" that's already in the pipeline. Translation: Netley's seeing more actionable opportunities than it can execute with existing capital, a signal that the secondary market's recent growth spurt isn't slowing down. GP-led continuation funds, the deals where fund managers transfer portfolio companies into new vehicles while offering existing LPs a chance to cash out or roll forward, have exploded from niche strategy to mainstream exit tool in the past 24 months.

What makes this noteworthy isn't just that Netley raised capital — firms do that constantly. It's that they're raising specifically for tertiaries, a structure that sits one layer deeper than traditional LP secondaries. In a tertiary transaction, Netley and similar buyers purchase interests in continuation vehicles themselves, effectively betting on the GP's ability to create value in an already-extended holding period. It's meta-secondaries: buying into funds that were created to give liquidity to funds that couldn't exit the old-fashioned way.

The fact that institutional LPs are committing fresh capital to this strategy suggests they're comfortable with the risk-return profile — and expect the supply of these deals to keep coming. Because here's the thing: continuation funds only proliferate when traditional exits get harder. And in early 2026, they're still harder than anyone wants to admit.

The secondaries market has been "having a moment" for about five years now, but 2025 and early 2026 have been different. Transaction volume in the global secondaries market hit an estimated $140 billion in 2025, according to Evercore's annual report, up from roughly $110 billion the prior year. GP-led deals — the continuation funds and single-asset processes that dominate headlines — now represent more than 60% of that volume, a complete reversal from a decade ago when LP portfolio sales were the dominant structure.

The shift reflects a structural change in how private equity operates. Funds raised in 2017-2019 are now deep into extension territory, holding companies longer than their original 10-year fund lives anticipated. IPO markets haven't cooperated. M&A has been choppy. Sponsor-to-sponsor sales are competitive and often require taking a haircut. So GPs have turned to continuation vehicles as a way to keep their best assets, reset the clock, and offer liquidity to LPs who want out — all while avoiding a messy fire sale.

For firms like Netley, that creates opportunity. When a GP launches a continuation fund, not every LP wants to roll their interest forward. Some need liquidity. Some don't like the repriced valuation. Some just want to move on. Those selling LPs create supply for secondaries buyers, who step in to purchase the rolled interests or the stakes being sold. Tertiaries players go one step further: they buy into the continuation vehicle itself, effectively partnering with the GP on the extended hold thesis.

It's a bet that requires conviction — you're buying an asset that's already been held for five-plus years, at a valuation that's been marked up through multiple fund cycles, with an exit timeline that's inherently uncertain. But if the GP executes and generates another leg of value creation, the returns can be compelling. Netley's willingness to raise fresh capital for this strategy suggests they're finding those opportunities at prices that work.

Netley Capital isn't a household name outside secondaries circles, but it's carved out a defensible niche. The firm focuses on what it calls "tertiaries and co-investments," which in practice means buying LP interests in continuation vehicles, participating in single-asset secondaries processes, and selectively co-investing alongside GPs in situations where they're transferring assets into new structures. The firm was founded by veterans of the European secondaries market and operates primarily out of London, though its deal flow spans Europe and North America.

The tertiaries label is important. In secondaries parlance, a "primary" LP buys into a fund at inception. A "secondary" buyer purchases an LP interest in an existing fund from an LP looking to sell. A "tertiary" buyer goes one layer deeper, purchasing interests in vehicles that were themselves created through secondary transactions — most commonly, continuation funds. It's a relatively new term for a relatively new market structure, and it's growing fast because continuation funds are growing fast.

The risk profile is distinct. Tertiary buyers are betting on assets that have already been held for an extended period, often at valuations that reflect significant appreciation from cost basis. The GP has already had years to execute its original value-creation plan — operational improvements, bolt-on acquisitions, margin expansion, whatever the playbook was. Now the GP is asking for more time, more capital, and a higher valuation. Tertiary buyers need to believe there's a credible second act.

Netley's fresh commitments suggest its LPs believe the firm can consistently find those credible second acts at attractive entry prices. That's harder than it sounds. Continuation funds are often priced at or near the GP's latest mark, and the selling LPs who create supply aren't always the most sophisticated — sometimes they're just tired of waiting. The challenge for tertiaries buyers is avoiding the adverse selection trap: buying into situations where the only LPs selling are the ones who know something you don't.

Netley didn't name the investors behind the fresh commitments, which is standard for this kind of announcement. But the fact that commitments are coming at all is worth unpacking. Institutional LPs — the pensions, endowments, and sovereign wealth funds that anchor secondaries funds — have been recalibrating their private markets exposure throughout 2025 and into 2026. Many are overallocated to private equity as a percentage of total portfolio value, thanks to the denominator effect (public markets lagged while private assets stayed marked at high valuations). That's made some LPs sellers, not buyers.

The backdrop for Netley's fundraise is a continuation fund market that's showing no signs of slowing. In 2023, GP-led secondaries volume was roughly $80 billion globally. In 2025, it approached $90 billion, according to intermediaries active in the market. Early 2026 data suggests the pace is holding or accelerating, driven by a backlog of funds raised in the mid-to-late 2010s that are now bumping up against the end of their fund lives with portfolios they're not ready to exit.

The math is straightforward: a fund raised in 2017 with a 10-year life is now in year nine. If it raised capital in 2018, it's in year eight. Those funds were underwriting exits in 2024-2026, but the exit environment hasn't cooperated. IPO windows have been inconsistent. Strategic buyers are cautious. Sponsor-to-sponsor deals are happening, but often at valuations that don't reflect the marks GPs have been carrying. So GPs are choosing to hold, and continuation funds are the mechanism that makes holding possible without forcing LPs to stay locked in against their will. Jefferies, one of the most active advisors in the space, reported advising on more than 50 GP-led processes in 2025 alone, a record for the firm.

Critics argue continuation funds are a way for GPs to avoid accountability for missing exit windows or overvaluing assets. Supporters counter that they're a rational response to lumpiness in exit markets and offer LPs genuine choice — you can sell at a market-clearing price or roll forward if you believe in the next phase. Both can be true. What's undeniable is that the volume of these transactions is rising, and that creates structural demand for capital providers like Netley who can step in as buyers.

There's also a reflexive element: the more continuation funds get done, the more accepted they become as a standard tool, which makes the next one easier to execute. GPs who were hesitant to pursue continuation vehicles in 2022 are now running their second or third process. LPs who were skeptical are now evaluating them as routine liquidity events rather than red flags. The market is normalizing around a structure that didn't really exist at scale a decade ago.

For Netley, that normalization is a tailwind. Every continuation fund that closes creates potential tertiary supply. Every GP that successfully executes a continuation vehicle and generates returns emboldens the next GP to try it. The firm is betting that this isn't a cyclical surge in deal flow — it's a structural shift in how private equity operates when exit markets are harder to time.

Of course, there's a less optimistic way to read all of this. The continuation fund boom could be a sign that private equity has a valuation problem it's not ready to confront. If assets were genuinely ready to exit at the marks GPs are carrying, they'd be exiting — into M&A, into IPOs, into sponsor sales. The fact that GPs are choosing to transfer them into continuation vehicles instead suggests that either (a) the marks are accurate but the exit windows haven't opened yet, or (b) the marks are optimistic and GPs are buying time to grow into them.

Tertiaries buyers like Netley are effectively taking the over on that question. They're betting that the GPs running these continuation funds can deliver another leg of value creation that justifies the entry valuation. But if the underlying assets were overmarked to begin with, or if the value-creation thesis for the extended hold doesn't play out, tertiary buyers could be left holding depreciated interests in vehicles that were priced for perfection.

For limited partners, the rise of continuation funds and the tertiaries market is a double-edged sword. On one hand, it creates liquidity where none existed — if you want out of a fund that's holding assets longer than expected, a continuation fund process gives you a market-clearing exit. On the other hand, it shifts power dynamics. GPs can now extend holding periods unilaterally (subject to LP vote thresholds) and reset economics, often with new management fees and carry structures that restart the clock on performance incentives.

Some institutional LPs are starting to voice concerns. In private conversations (and occasionally in public), they're questioning whether continuation funds are being used appropriately or whether they're becoming a crutch for GPs who missed exit windows. The optics are tricky: if a GP holds an asset for seven years, marks it up significantly, then transfers it into a continuation fund at that mark, who's actually capturing the value creation — the original LPs, or the new LPs coming in through the continuation vehicle?

The answer depends on the deal structure, the valuation methodology, and whether the GP is offering meaningful discounts to NAV for LPs who choose to roll forward. In many continuation fund processes, rolling LPs get a small discount or fee reduction as an incentive to stay in, while selling LPs exit at a price determined by what secondary buyers like Netley are willing to pay. If Netley's willing to pay 95% of NAV, that sets the exit price for sellers — which means the selling LPs are taking a 5% haircut relative to the GP's mark.

That's fine if the mark was accurate. It's less fine if the mark was inflated. And it's a real problem if LPs feel they're being forced to choose between selling at a discount or rolling into a vehicle with reset economics that favor the GP. Some LPs are responding by demanding better terms — lower fees on continuation vehicles, stronger governance rights, clearer valuation methodologies. Others are just saying no and selling, which is where firms like Netley come in.

There's also an unresolved governance issue lurking beneath the continuation fund boom. In a traditional fund, the GP's incentives are aligned with LPs through carried interest: the GP only makes money if the fund returns capital and generates profits above a hurdle rate. In a continuation fund, those incentives reset. The GP gets a new management fee stream (often for another 5-7 years) and a new carry waterfall that starts from the continuation fund's entry valuation, not the original cost basis.

That creates potential misalignment. If a GP transfers an asset into a continuation fund at a $500 million valuation, and that asset was originally acquired for $200 million, the GP has already captured significant appreciation in the original fund's carry. Now, in the continuation vehicle, the GP gets to earn carry again on value created above $500 million. Some LPs argue that's double-dipping — the GP is getting paid twice for the same asset. GPs counter that the continuation vehicle involves new risk, new capital deployment, and a new value-creation plan, so new incentives are justified.

Netley's decision to raise fresh commitments for its tertiaries platform is a vote of confidence that the current deal flow environment persists — or accelerates — over the next 18-24 months. That's a reasonable bet if you believe that exit markets remain choppy, fund lives continue to extend, and GPs continue to view continuation funds as a legitimate tool rather than a last resort.

The counterargument is that if exit markets improve — if IPO windows open sustainably, if M&A picks up, if strategic buyers start paying up again — the need for continuation funds diminishes, and with it, the supply of tertiary opportunities. A world where private equity exits normalize is a world where secondaries deal flow moderates and pricing power shifts back toward sellers.

But even in that scenario, there's likely a baseline level of continuation fund activity that persists. GPs have now seen how the tool works and what it enables. LPs have gotten comfortable with the process. Intermediaries have built practices around it. The infrastructure exists, and infrastructure tends to justify its own existence. Netley's betting that even if the current surge moderates, the structural shift toward continuation funds as a standard exit tool is permanent.

The firm's also betting that it can continue to source deals at prices that offer attractive risk-adjusted returns. That requires relationships, speed, and underwriting discipline — the ability to say no when the valuation doesn't work or the GP's value-creation thesis doesn't hold up. It's not a strategy that scales infinitely, but it doesn't need to. The secondaries market is large enough, and continuation fund deal flow is consistent enough, that a well-positioned specialist can build a durable business without needing to compete on scale with the mega-funds.

Netley's fundraise is a data point in a much larger trend: capital is pouring into secondaries strategies across the board. Blackstone closed a $22 billion secondaries fund in late 2025, the largest ever. Goldman Sachs Asset Management, Ardian, and Coller Capital are all raising or deploying multi-billion-dollar secondaries vehicles. Even firms that historically focused on primary fund investing are launching secondaries capabilities, recognizing that liquidity provision is becoming a distinct and defensible strategy.

The competition is intensifying, which raises the question: can firms like Netley compete against the mega-funds? The answer is probably yes, but only in specific niches. The largest secondaries buyers focus on portfolio deals — large LP portfolio sales where they're buying exposure across dozens of underlying funds. Those transactions require billions in equity and operational scale that Netley doesn't have.

But GP-led deals and tertiaries are different. They're smaller, more bespoke, and require specialized underwriting of individual assets rather than portfolio diversification. A $500 million continuation fund process doesn't need a $20 billion equity check — it needs a $50-150 million check and a team that can move quickly, underwrite the asset, and close without drama. That's where specialists like Netley can compete. They're not trying to be Blackstone. They're trying to be the go-to buyer for mid-market continuation funds and tertiary opportunities where speed and sector expertise matter more than balance sheet size.

The risk is that the mega-funds move downstream. If Blackstone or Goldman decides that tertiaries are attractive enough to dedicate a sleeve of capital to, they can outbid and out-resource smaller players. But so far, that hasn't happened at scale — the mega-funds are still focused on the largest, most diversified deals. Which leaves room for firms like Netley to operate in the gaps.

Netley's fresh capital raise is a bet on the continuation of current market conditions — extended hold periods, steady continuation fund deal flow, and continued LP willingness to sell at modest discounts to NAV. Whether that bet pays off depends on how three key questions resolve over the next 12-24 months.

First: Do exit markets improve sustainably? If IPO windows open and stay open, if M&A volumes recover, if strategic buyers start paying up again, the pressure to pursue continuation funds eases. GPs will exit the traditional way. Continuation fund volumes moderate. Tertiary deal flow slows. Netley's bet looks less compelling. But if exit markets stay choppy — and there's no strong evidence they won't — continuation funds remain the path of least resistance, and Netley's pipeline stays full.

Second: Do LPs push back on continuation fund economics? If institutional LPs start demanding better terms — lower fees, stronger governance, more aggressive discounts to NAV — the economics of continuation funds shift. GPs may pursue them less aggressively. Tertiary buyers may find better entry prices. Or LPs may just vote with their feet and refuse to participate, which would create more selling LPs and more tertiary supply. Either way, LP sentiment matters, and it's evolving.

Third: Do the assets perform? Ultimately, tertiaries is a bet on operational execution. Netley's buying into continuation vehicles at valuations that assume continued value creation. If the GPs running those vehicles deliver — revenue growth, margin expansion, successful exits in 3-5 years — the returns work. If they don't, Netley's holding overpriced interests in underperforming assets with limited liquidity. The jury's still out on the 2023-2024 vintage of continuation funds, and it'll be another 2-3 years before we know how that cohort performs.

For now, Netley's making the bet that the answers to those three questions break in their favor. Fresh commitments suggest their LPs agree — or at least are willing to allocate capital to find out. In a market where certainty is scarce and exit timelines are unpredictable, that's about as much conviction as anyone's willing to offer.