Private Equity Firm RCP Advisors Raises $1.26 Billion in Weeks as Investors Pivot to Secondary Market Despite Broader Fundraising Slowdown
The New Secondaries Kingmakers: Why $1.26 Billion Tells a Bigger Story Than One Fund’s Win
RCP Advisors’ lightning-fast raise shows how private equity’s liquidity engine is being rewired—and where investors can still find real value in a 90-cent market.
DALLAS—When RCP Advisors wrapped up its fifth secondary fund today, the numbers spoke louder than the press release. The firm pulled in $1.26 billion, topping its $1 billion target, and did it in what executives called “a very short timeframe.” But the bigger story isn’t that another fund closed oversubscribed. It’s that this raise puts a spotlight on how institutional investors are reshaping their private equity playbooks, turning secondaries from one-off liquidity tools into the backbone of portfolio strategy.
The timing couldn’t be more telling. In the first half of 2025, secondary deal volume hit around $103–105 billion—a jaw-dropping 51% increase from last year. If the pace holds, the market will smash every record on the books. But here’s the catch: pricing has tightened. Limited partner stakes now sell at about 90% of net asset value, up from 88% a year ago. The easy discounts—the bread and butter of early secondary strategies—are disappearing fast.
Jon Madorsky, RCP’s managing partner, put it this way in his announcement: “Our focus on the small buyout fund space resonates with investors now more than ever.” RCP, part of P10 Inc., doesn’t chase mega-deals. Instead, it hunts in the lower middle market, targeting secondaries tied to buyout, growth, and restructuring funds where inefficiencies still linger.
A Market Where Underwriting, Not Discounts, Wins the Day
For years, secondary buyers lived off the spread—the difference between discounted purchase prices and eventual cash flows. That era is fading. With most GP-led continuation vehicles now clearing at or above 90% of net asset value, success depends less on catching a bargain and more on picking the right assets and structuring deals wisely.
That shift explains why RCP’s specialty attracted money so quickly, even while fundraising overall has slowed. The lower middle market—companies worth between $10 million and $500 million—remains full of quirks that big funds can’t easily tap. Information is messy, auctions are rare, and deals often come down to personal networks. For specialists, that’s fertile ground.
Industry veterans say this slice of the market may be one of the last corners where pricing truly varies from deal to deal. While mega-funds fight over billion-dollar continuation vehicles, RCP and firms like it sift through regional sponsors and founder-led businesses, where due diligence on the GP and company fundamentals can uncover hidden value.
What’s Driving the Secondary Surge
The boom in secondaries isn’t just about today’s tough exit market. Yes, muted IPOs and sluggish M&A since 2022 have trapped capital longer, and higher interest rates have raised the cost of waiting. But the more permanent story is how institutional investors now use secondaries.
No longer a distress signal, these deals have become essential tools. They help pension funds and endowments manage portfolio duration, smooth out denominator effects, and rebalance strategically. In 2024, first-time sellers flocked to the market, and billion-dollar transactions became routine instead of headline-worthy.
Meanwhile, GP-led continuation funds—once eyed with suspicion—have gone mainstream. Governance safeguards such as third-party valuations and opt-in structures for existing LPs gave investors comfort. On top of that, the financing toolkit expanded. Net asset value credit lines and preferred equity now give buyers more options to juice returns, though they also add complexity.
Concentration of Capital, Despite a Weak Fundraising Backdrop
Here’s the paradox: traditional buyout fundraising has slumped in 2025, yet secondary funds are thriving. And not just thriving—concentrating. Ardian reportedly closed around $30 billion, while Carlyle’s AlpInvest unit pulled in $20 billion. Partners Group rolled out a $10–12 billion strategy last year, and 50 South Capital’s multi-strategy fund closed oversubscribed in July.
So while many LPs are tightening commitments to new buyout funds, they’re carving out larger allocations for secondaries. Why? Because these funds often deliver faster J-curves and earlier cash back than primary investments.
For P10 Inc., RCP’s parent company (NYSE: PX), the $1.26 billion close bolsters its claim as a differentiated solutions platform. CEO Luke Sarsfield emphasized in the release: “We strive to deliver best-in-class access to differentiated investments in the lower middle market.” That translates to fee-bearing assets under management, stronger distribution power, and credibility in a crowded field. Still, analysts will watch closely how fast RCP deploys the capital, how it balances GP-led vs. LP-led deals, and whether its underwriting discipline holds up.
Governance Tensions Rising
As continuation vehicles now account for roughly 40–45% of the market, governance has become the hot-button issue. LP advisory committees are asking sharper questions about fairness opinions, fee splits, and conflicts when GPs act as both seller and ongoing manager. Terms matter—a lot. The economics of rollover stakes, earnouts, and hurdle rates can tilt benefits toward either investors or sponsors.
Observers warn of pressure points ahead. Bigger fund sizes could tempt managers to stretch their mandates or loosen underwriting standards. The lure of leverage, whether at the fund or deal level, might boost returns when markets are calm but could backfire hard in a downturn.
And shocks remain a wild card. A credit crunch would cut asset values and choke financing for continuation vehicles. On the flip side, if IPOs and M&A roar back, discounts could shrink further, leaving buyers scrambling for differentiated deal flow.
What This Means for Investors
For institutional allocators, the playbook is evolving. Anchoring portfolios with mega-platforms still makes sense for broad market exposure and liquidity. But pairing those with niche specialists—like small-buyout secondary managers—offers a shot at alpha.
Due diligence should now focus less on general promises and more on proof: evidence of bilateral transactions, proprietary deal flow, and disciplined governance protections. Especially in GP-led deals, investors should look for independent valuations, strong rollover options, and terms that keep GPs and LPs aligned.
The market’s message is clear. Alpha will come not from buying cheap, but from owning assets that throw off steady cash and withstand market swings. Firms that prioritize free cash flow yield, conservative leverage, and clear distribution paths may be best positioned as pricing levels out.
Looking out 12–24 months, most analysts expect GP-led transactions to keep climbing, possibly topping 45% of the market. LP portfolio pricing may settle between 86% and 92% of NAV, with spreads driven less by broad discounts and more by sector, vintage, and sponsor quality.
Investment Disclaimer: Private equity carries significant risks, including illiquidity and leverage. Past performance isn’t a predictor of future returns. Investors should consult advisors to assess strategies in light of their individual goals and risk tolerance.
The takeaway? RCP’s successful raise highlights a market in transition. Secondaries are no longer a sideshow—they’ve become the core infrastructure of private equity portfolios. And in this new normal, advantage doesn’t belong to those chasing discounts but to those who can navigate complexity with precision.