For years, converting paper gains into cash has been challenging for investors, who often wait for exits that rarely materialize. Liquidity in private markets remains scarce. In 2025, this picture is starting to change, with early green shoots emerging.
From secondaries and continuation vehicles to standout IPOs and megadeals, innovative routes are springing open. Here’s how the game is shifting and what syndicate leads, SPV platforms, and investors need to know.
The Liquidity Crunch isn’t Over Yet
The private market liquidity challenge remains a real issue. After a decade of rapid deployment, many funds are sitting on paper gains but face minimal LP distributions, with exit timelines that have stretched beyond the 10-year model, leaving GPs under mounting pressure to return capital.
As PwC notes in its Global M&A Industry Trends 2025 report, “Private equity funds are facing heightened pressure from limited partners to return capital, prompting increased focus on creative liquidity strategies.”
This shift is forcing fund managers to innovate by engineering liquidity internally and using secondaries, structured exits, and continuation vehicles to recycle capital and maintain momentum while also doubling down on improving DPI to maximize returns.
Secondaries Offer a Steady Lifeline
Secondaries are quietly driving liquidity in private markets. With valuations resetting and risk appetite improving, both LP-led and GP-led transactions are gaining traction.
Investors use venture secondaries to rebalance portfolios and lock in partial gains, while fund managers use them to reset vintage exposure and attract new capital.
The biggest value? Optionality. Secondaries allow funds to adapt to longer holding periods without forcing full exits.
If you’re exploring flexible exit routes or liquidity solutions for your fund or syndicate, schedule a call to learn how SPVs can unlock liquidity in your private market portfolio.
Select IPOs Signal Confidence
IPO activity remains selective, but strong names are breaking through. The Figma IPO in 2025 was a turning point, restoring faith that high-quality, venture-backed companies can still deliver meaningful VC liquidity events.
Figma’s public debut demonstrated that disciplined growth and sustainable margins continue to attract interest from the public market. This kind of exit revives confidence across late-stage ventures and reinforces the distribution path.
Other venture-backed IPOs, such as Stripe and Databricks, remain on deck, fueling cautious optimism that the IPO exit window is slowly reopening for top-tier tech companies.
Continuation Funds Gain Ground Among GPs
Continuation funds have quickly evolved from niche to mainstream GP-led liquidity tools in 2025. These venture continuation vehicles allow GPs to roll over outperforming assets, offering LPs the option to cash out or stay invested.
For example, in Singapore, fund managers such as Capital Square Partners have set up continuation funds to give investors more options. Essentially, they move successful companies from an existing fund into a new fund, letting some investors cash out while others stay invested. One recent deal raised approximately US $700 million, showing how continuation funds are becoming a practical tool for managing liquidity in private markets.
Why Continuation Funds Are Rising
Fund managers are realizing that not all winners should be sold too early. By using continuation funds, they can extend ownership in breakout portfolio companies while providing fund liquidity solutions to investors who prefer earlier distributions.
The Strategic Shift
This model aligns LP optionality, GP upside, and continued portfolio backing. What was once viewed as a last-resort structure is now a sophisticated means of managing liquidity cycles.
According to Investopedia, “firms are now selling companies to themselves through ‘continuation funds,’ essentially moving investments from one pocket to another,” a practice that accounted for $41 billion in deal value in the first half of 2025. It reflects how heavily firms are relying on these vehicles as traditional exit routes, like IPOs and strategic M&A, remain limited.
M&A Deals Drive Alternative Liquidity Routes
The resurgence of M&A activity in private markets is another key driver of liquidity in 2025. Corporate buyers are stepping up as strategic acquirers, providing an essential outlets for venture exits not yet suited for public markets.
Key themes defining liquidity through acquisitions this year:
- Corporate acquirers are increasingly targeting smaller, synergistic tuck-in acquisitions over large-scale deals.
- AI, fintech, and climate tech are leading the charge in strategic acquisitions.
- Cross-border M&A, especially across Asia and the U.S., is unlocking liquidity for Singapore-based venture funds.
While M&A deals don’t provide the same visibility as IPOs, they’re often faster, quieter, and more aligned with founders’ strategic goals, making them one of the most dependable routes for liquidity in a slow market.
The Green Shoots of a Broader Liquidity Recovery
Across all channels, private market recovery is beginning to take shape. Secondaries are gaining efficiency, continuation funds are scaling, and select venture-backed IPOs are paving the way for broader confidence.
The venture liquidity outlook for 2025 appears cautiously optimistic as funds are adapting, LPs are becoming more patient yet proactive, and GPs are demonstrating that flexibility is the new edge.
We may still be in the early stages, but the foundations of a healthier liquidity in the private markets ecosystem are being rebuilt one deal at a time.
Final Thoughts
Liquidity in private markets is a strategic choice. In 2025, secondaries, continuation funds, selective IPOs like Figma, and targeted M&A deals are creating real opportunities for LPs, GPs, and syndicate leads. Funds that plan for liquidity early, leverage these tools, and structure exits with flexibility will capture upside while managing risk.
The key to success is optionality: unlock partial gains with secondaries, extend value with continuation vehicles, and keep an eye on high-quality IPO and M&A opportunities.
Turn liquidity into your advantage. Book a call with us or contact us at info@auptimate.com, and one of our experts will be happy to assist you.
