Beyond the Headlines: Why Credit Secondaries Are Regaining Momentum

Credit secondaries are regaining momentum and moving toward an established role in private-credit portfolio management.

• Activity slowed in Q2 2026 over concerns about asset quality, BDC redemptions, and valuations, then returned in Q3 and Q4 with a growing backlog for Q1 2027.
• Q1 and Q2 marks, with Q3 adding another valuation reference point, have improved buyers' ability to separate temporary mark-to-market noise from fundamental credit deterioration.
• Recent transactions have shifted toward $250 million to $500 million of equity, widening participation among newer platforms, specialist investors, and established secondary buyers.
• Pricing has improved for seasoned, performing senior-secured portfolios, while buyers remain cautious toward stressed credits, uncertain valuations, weak GP access, and challenged sectors.
• Potential supply from non-traded BDC redemptions could increase in 2027, while the leveraged-loan maturity wall begins in 2028 and accelerates through 2032.

Takeaway: Jefferies expects continued growth through 2027 and beyond as private-credit supply, liquidity needs, dedicated capital, and activity across asset-based finance, infrastructure debt, mezzanine, special opportunities, and fund finance expand the market.