In 2023, private equity secondary market volumes surged past $100 billion, according to Preqin data, shattering records amid a liquidity crunch. This explosion addresses prolonged holding periods, LP/GP demands, and aging funds, fueled by GP-led continuation vehicles, digital platforms, and institutional inflows. Discover the drivers, dynamics, and future outlook reshaping this vital market.
Definition and Core Mechanics
Secondary market transactions involve buying/selling limited partnership interests in existing private equity funds at negotiated discounts to Net Asset Value (NAV). These deals provide liquidity solutions for illiquid assets. Buyers gain access to mature portfolios without waiting for new fund commitments.
The core process starts with sellers, often limited partners (LPs), approaching intermediaries or platforms to offload interests. Buyers conduct due diligence processes, reviewing fund performance, holdings, and valuations. Transactions close after negotiating NAV discounts, typically in the 10-20% range as seen in indices like the Coller Capital Index.
Deal flow follows a clear sequence: seller motivation arises from portfolio rebalancing or liquidity needs, leading to marketing via auctions or bilateral trades. Buyers bid based on pricing dynamics, factoring in remaining fund life and underlying assets. Settlement involves transferring interests with legal transfer of economic rights and information access.
- Seller lists interests with details on fund vintage and IRR.
- Buyers submit indications of interest after data room review.
- Final pricing and documentation finalize the transfer.
- Post-close, buyers step into LP positions with pro-rata rights.
Historical Context and Growth Trajectory
Secondary transaction volumes grew from $11B in 2010 to $185B in 2023, achieving 25% CAGR according to Preqin data. This surge reflects the exploding growth in private equity secondaries as investors seek liquidity solutions for illiquid assets. Early deals in the 1980s laid the foundation for this market expansion.
In the 1980s, the first secondary transactions emerged, often as bilateral trades between limited partners looking to exit early. These LP-led secondaries provided basic portfolio rebalancing options amid long holding periods. The market remained niche until broader adoption.
The 2008 financial crisis accelerated activity, with GPs and LPs using secondaries for accelerated exits during economic uncertainty. Continuation vehicles and fund restructurings gained traction as liquidity premiums tightened. This period marked a shift toward structured solutions like tender offers.
From 2020 to 2023, the market exploded due to recession fears and dry powder deployment needs. PitchBook reports 2023 volumes hit a record $185B, while secondary funds’ AUM surpassed $200B. The Coller Capital Barometer indicates strong GP interest, with many planning secondaries for capital recycling and J-curve mitigation.
Primary Drivers of Explosive Growth
Three structural forces propelled secondary volumes from $60B in 2020 to $185B in 2023: LP liquidity needs, GP portfolio management, and aging fund supply. Limited partners face pressure to rebalance portfolios amid dry powder buildup. General partners seek to extend top performers through continuation vehicles.
Maturing vintage years from 2014 to 2018 now flood the market with supply. This creates opportunities for buyers seeking seasoned assets at potential NAV discounts. The result drives explosive growth in secondary markets for private equity.
LP-led secondaries dominate as pensions and endowments sell interests for liquidity. GPs pursue restructurings to hold winners longer. Buyers gain access to diversified portfolios without J-curve risks.
Experts note this shift give the power tos investors through fractional ownership and faster capital recycling. Transaction volumes reflect a deal flow surge, with platforms like Forge Global facilitating trades. Overall, these forces fuel market expansion.
Liquidity Demands from LPs and GPs
LPs faced $500B+ dry powder pressure in 2023, driving 40% of secondary volume as pensions and endowments sought liquidity (ILPA data). Pensions represent key sellers, often offloading illiquid assets for cash. This rebalancing supports portfolio diversification amid economic uncertainty.
Family offices, seeking faster returns, contribute significantly through LP-led secondaries. High-net-worth individual platforms enable retail access via lower entry barriers. Preqin data shows 65% of LPs used secondaries in 2023 versus 25% in 2018.
GPs motivate sales to extend best assets via continuation vehicles. These structures allow holding winners beyond traditional fund lives. Buyers benefit from proven cash flows and reduced manager risk.
Practical examples include strip sales where single LPs exit entire portfolios. Tender offers provide quick liquidity solutions. This dynamic enhances capital efficiency for all parties.
Prolonged Holding Periods in Primary PE
Average PE holding periods extended from 4.5 years in 2010 to 6.2 years in 2023, creating secondary supply (Bain & Company). Exits slowed sharply post-2019 due to market conditions. GPs respond with fund restructurings and GP-led secondaries.
Vintage years 2016-2018 remain largely unexited, pushing supply into secondaries. LPs gain access to seasoned portfolios without J-curve exposure. This mitigates vintage diversification risks and boosts IRR potential.
Continuation vehicles exemplify GP strategies for prolonged holds. They transfer assets to new funds, often at NAV or slight discounts. Buyers enjoy operational improvements from add-on acquisitions.
Examples like recapitalizations recycle capital efficiently. Such moves align interests through preferred equity structures. Overall, longer holds drive secondary market growth.
Supply Surge from Aging Funds
$2.5 trillion in PE funds reach maturity 2024-2028, flooding market with secondary supply (PitchBook). Vintages 2014-2017 enter prime selling windows. Mega-fund GPs lead with restructurings and strip sales.
2023 recorded 2,500+ deals versus 800 in 2019, signaling a deal flow surge. Single LP portfolio sales accelerate volume. Buyers target buyout funds and venture capital secondaries.
GP-led transactions, including continuation vehicles, dominate supply. Tender offers and bilateral trades provide flexible exit paths. This benefits institutional investors seeking risk-adjusted returns.
Practical cases involve middle-market focus with NAV discounts. Platforms streamline due diligence on aging assets. The surge democratizes investing through broader investor access.
Evolving Market Dynamics
The secondary market for private equity has evolved from an LP-dominated space, where limited partners drove about 85% of volume in 2015, to a balanced mix of LP and GP transactions with a 60/40 split by 2023. Record volumes reflect this shift, alongside evolving transaction types and pricing compression. GP-led deals surge, while synthetics emerge as key liquidity solutions.
Transaction volumes continue to climb, fueled by demand from institutional investors and family offices seeking portfolio diversification. GPs use these markets for capital recycling and extension of high-performing assets. Buyers benefit from lower entry barriers and accelerated exits in illiquid assets.
LP-led secondaries provide quick liquidity through portfolio sales, but GP-led options like continuation vehicles offer more control. Synthetics avoid transfer taxes, aligning interests without full asset transfers. This evolution supports exploding growth amid economic uncertainty.
Market expansion democratizes access, drawing high-net-worth individuals and even retail investors via platforms. Pricing dynamics improve with narrower NAV discounts, enhancing risk-adjusted returns. Experts recommend due diligence on manager selection and vintage diversification.
Increased Transaction Volumes and Values
Secondary volumes hit $185B in 2023, a record up 35% from the prior year, with average discounts narrowing to 11% from 15%. This deal flow surge underscores the secondary market explosion, driven by seller motivations like portfolio rebalancing and dry powder deployment from buyers.
Transaction values reflect broad participation across US dominance at 55%, Europe at 30%, and Asia at 10%. Large deals over $100M now capture 45% of volume, favoring institutional investors and family offices. Smaller trades support middle-market focus and fractional ownership.
| Year | Volume | YoY Growth |
| 2021 | $115B | – |
| 2022 | $137B | +19% |
| 2023 | $185B | +35% |
Investors use these markets for J-curve mitigation and IRR enhancement. For example, a family office might sell venture capital secondaries to fund growth equity opportunities. Buyers conduct valuation via EBITDA multiples and comparable transactions.
Shift from LP-led to GP-led Transactions
GP-led transactions grew from 10% of volume in 2019 to 35% in 2023, led by continuation vehicles. Unlike LP-led deals focused on quick liquidity through portfolio sales, GP-led processes allow asset extension and maintain GP control. This shift aids holding period management and fund life extension.
GPs retain 20-30% carry in these structures, while LPs gain access to winners without full exits. HarbourVest data highlights growth drivers like tender offers and fund restructurings. Buyers secure preferred returns and alignment through structured waterfalls.
- LP-led: Quick sales of direct secondaries or strip sales for immediate cash.
- GP-led: Continuation vehicles, single-asset deals, or platform acquisitions for prolonged value creation.
- Hybrid: Stapled primaries combining new commitments with secondary transfers.
Practical advice includes reviewing clawback provisions and key person events. An example is a buyout fund using GP-led secondaries for recapitalizations. This give the power tos GPs in a challenging fundraising environment.
Emergence of Synthetic Secondaries
Synthetic secondaries grew 50% year-over-year to $25B in 2023, providing LP liquidity without actual LP position transfers. These structures use NAV loans with 10-15% leverage, preferred equity, or subscription lines to mimic secondary benefits. They avoid transfer taxes and preserve GP alignment.
Types include NAV financing for immediate capital, preferred equity for upside participation, and subscription facilities for ongoing needs. Buyers deploy dry powder efficiently, mitigating interest rate impacts. Risks like double leverage demand stress testing and scenario analysis.
- NAV loans: Leverage fund NAV for liquidity, common in venture capital secondaries.
- Preferred equity: Structured returns without ownership dilution.
- Subscription lines: Bridge capital calls, aiding portfolio diversification.
A $500M Lexington Partners synthetic deal exemplifies capital efficiency. Investors should assess counterparty risk and documentation complexity with legal advisors. Synthetics enhance market liquidity and support evergreen funds.
Technological and Structural Enablers
Digital platforms reduced settlement times from over 90 days to T+10, enabling billions in electronic secondary volume. These tools turned the fragmented OTC market for private equity into a structured asset class. Trading platforms and data rooms now connect buyers and sellers efficiently.
Pricing algorithms analyze vast datasets to set fair values for illiquid assets. This shift supports portfolio diversification and liquidity solutions for limited partners. Structural changes like standardized reporting further boost confidence in secondary transactions.
Investors use these enablers for accelerated exits and rebalancing amid economic uncertainty. Family offices and institutions benefit from lower entry barriers. The result is exploding growth in secondary markets.
Experts recommend due diligence on platform reliability before trading. Combining tech with regulatory frameworks ensures smooth deal flow. This evolution give the power tos investor access to private equity secondaries.
Digital Platforms and Data Analytics
Forge Global processed $3.2B in secondary volume in 2023, matching buyers and sellers via RFQ systems. These platforms streamline secondary transactions for private equity funds. Data analytics provide real-time insights into deal flow.
EquityZen handles $2.1B annually with a focus on accredited investors. Nasdaq Private Market supports $1.8B for institutional trades. Such tools enable fractional ownership in illiquid assets.
| Platform | Volume | Fees | Best For |
| Forge Global | $3.2B | 1-2% | HNWI |
| EquityZen | $2.1B | 5% | Accredited |
| Nasdaq Private | $1.8B | Institutional | Institutional |
| SharesPost | Acquired | Varies | LP-led |
Choose platforms based on your needs, like high-net-worth individuals opting for Forge. Analytics help assess NAV discounts and pricing dynamics. This democratizes investing in venture capital secondaries.
Improved Pricing Models and Transparency
AI pricing models reduced bid-ask spreads from 20% in 2018 to 8% in 2023 using 50+ data points. These tools refine valuation methodologies for private equity secondaries. Buyers gain better risk-adjusted returns.
Key models include discounted cash flow plus comps, Monte Carlo simulations, and machine learning on datasets like Preqin. Each approach handles uncertainty in buyout funds or growth equity. Practitioners apply them for accurate pricing.
- Discounted cash flow evaluates future cash flows with EBITDA multiples.
- Monte Carlo runs scenarios for stress testing portfolios.
- Machine learning predicts values from comparable transactions.
The ILPA Reporting Template 3.0 standardizes NAVs for transparency. This cuts counterparty risk in GP-led secondaries. Investors should verify models during due diligence for IRR enhancement.
Investor Appetite and Capital Inflows
Secondary funds raised $125B in 2023, with 2.5x oversubscription across 150+ vehicles. New investors flock to these markets for portfolio diversification, attractive pricing, and lower J-curve effects. This surge reflects exploding growth in secondary markets for private equity.
Institutional players and high-net-worth individuals seek liquidity solutions for illiquid assets. Secondaries offer fractional ownership and accelerated exits, drawing capital amid economic uncertainty. Experts note strong buyer appetite fuels this market expansion.
Transaction volumes hit record highs, driven by LP-led and GP-led secondaries like continuation vehicles. Family offices and retail investors benefit from lower entry barriers and democratized investing. Dry powder deployment accelerates as fundraising environments tighten.
Interest rate impacts and inflation pressures boost demand for risk-adjusted returns. Vintage diversification across buyout funds and venture capital secondaries appeals broadly. This capital inflow underscores the secondary market explosion.
Diversification Benefits for New Investors
Secondaries provide immediate 3-4 year NAV visibility versus primary blind pool risk. New investors gain exposure to vintages from 2012-2020, spreading risk across market cycles. This vintage diversification reduces concentration in recent funds.
Access to top quartile managers with proven track records becomes feasible. Discounts of 7-12% lower entry costs, making elite strategies available to family offices and high-net-worth individuals. LP-led secondaries and direct secondaries enhance manager selection.
Due diligence processes focus on valuation methodologies like EBITDA multiples and comparable transactions. Buyers mitigate J-curve effects through immediate cash flows from mature portfolios. Research suggests secondaries deliver +300bps IRR over primaries.
Practical examples include strip sales and tender offers, offering portfolio rebalancing tools. New investors avoid long holding periods, achieving capital recycling efficiently. This structure give the power tos investor access in a deal flow surge.
Attractive Risk-Adjusted Returns
Secondaries delivered 14.2% net IRR for the 2018-2023 vintage versus 11.8% for primaries, per Burgiss data. Lower volatility and superior Sharpe ratios make them stand out. HarbourVest Secondary Fund X achieved a 17.2% net IRR as a real-world case.
Buyers capture alpha generation through NAV discounts and pricing dynamics. Growth equity secondaries and distressed assets provide upside in bull and bear markets. Volatility sits 12% lower than primaries, appealing in recession fears.
NAV loans and structured equity enhance returns via liquidity premiums. Platforms like Forge Global and Coller Capital facilitate efficient trades with tight bid-ask spreads. Experts recommend secondaries for IRR enhancement and beta exposure control.
Portfolio companies in mezzanine debt or buyout funds offer operational improvements and add-on acquisitions. Risk modeling via Monte Carlo simulations aids decision-making. These factors drive sustained buyer appetite.
Institutional Adoption Trends
65% of pensions now allocate to secondaries versus 25% in 2015, per Preqin Institutional Investors Report. Public pensions like California State Teachers target 5% allocations. Sovereign wealth funds such as GIC Singapore follow suit.
Insurance giants like Allianz dedicate 3% to these assets for stable yields. Institutional investors pursue secondaries market size growth amid AUM expansion. Trends include evergreen funds and open-ended structures for ongoing liquidity.
Adoption spans family offices to retail via crowdfunding platforms, lowering barriers. GP-led secondaries and fund restructurings gain traction for holding period extension. Economic uncertainty accelerates portfolio diversification strategies.
Key drivers involve compliance with SEC rules and accredited investor status. Institutional trends highlight capital efficiency and exit pathways. This shift marks private equity evolution toward broader investor give the power toment.
Regulatory and Economic Tailwinds
SEC Reg D amendments and low rates drove significant volume growth in secondary markets from 2020 to 2022. These changes, paired with cheap debt, fueled the expansion of private equity investments. Retail investors gained better access to illiquid assets through platforms offering liquidity solutions.
Regulatory easing lowered entry barriers for a wider audience. This shift encouraged portfolio diversification and fractional ownership in funds previously limited to institutions. Economic conditions amplified deal flow as limited partners sought accelerated exits.
Low interest rates prompted more dry powder deployment into secondaries. Investors used these markets for portfolio rebalancing amid economic uncertainty. The combination created a surge in transaction volumes and market expansion.
Examples include LP-led secondaries and GP-led continuation vehicles. These tools helped mitigate J-curve effects and enhance IRR through vintage diversification. Overall, these tailwinds democratized investing in private equity.
Favorable Regulatory Changes
2020 SEC accredited investor rule expansion opened the market to more Americans by broadening qualification criteria. This change boosted investor access to secondary transactions. Platforms like Forge Global and EquityZen saw increased retail participation.
Key updates included the Series D qualification test for easier accredited status. Crowdfunding limits rose to $5 million, enabling smaller investors to join private equity secondaries. Reg A+ expansions allowed larger offerings with fewer restrictions.
These shifts grew secondary access for retail platforms. High-net-worth individuals and family offices used them for portfolio diversification. Retail investors benefited from lower entry barriers and fractional ownership opportunities.
Practical examples involve tender offers and direct secondaries. Investors now conduct due diligence with better transparency on NAV discounts. This regulatory environment supports ongoing market expansion.
Low Interest Rate Environment (Until Recently)
Zero rates from 2020 to 2022 built substantial PE dry powder, with much deployed via secondaries. Low hurdle rates expanded PE pricing, compressing secondary discounts. This environment drove buyer appetite for LP-led and GP-led deals.
Fed quantitative easing encouraged LP risk-taking in illiquid assets. Secondary markets offered liquidity solutions during extended holding periods. Sellers motivated by rebalancing found willing buyers amid abundant capital.
Pricing dynamics improved with tighter bid-ask spreads on platforms like Nasdaq Private Market. Institutional investors pursued risk-adjusted returns through fund restructurings. The low-rate period accelerated exits and capital recycling.
Recent rate hikes shifted dynamics, yet secondaries remain vital for portfolio rebalancing. Examples include strip sales from buyout funds and venture capital secondaries. Investors now focus on manager selection and valuation methodologies for alpha generation.
Key Players and Market Infrastructure
The secondary markets for private equity rely on a network of intermediaries and growing funds that have built essential infrastructure. Rapid fund growth and platform expansions enable smoother liquidity solutions for illiquid assets. This setup supports exploding transaction volumes and broader investor access.
Top 10 secondary managers control 65% capacity: Coller ($20B AUM), Lexington ($18B), HarbourVest ($15B). These firms lead in LP-led secondaries and GP-led deals, offering portfolio diversification. Their scale drives market expansion through efficient pricing dynamics.
Infrastructure includes trading platforms like Forge Global and Nasdaq Private Market, which reduce settlement times and narrow bid-ask spreads. Institutional investors and family offices benefit from enhanced transparency. This foundation fuels the secondary market explosion.
Experts recommend focusing on due diligence processes when engaging these players. Valuation methodologies, such as comparable transactions and EBITDA multiples, help assess NAV discounts. Strong infrastructure lowers entry barriers for high-net-worth individuals.
Role of Specialized Intermediaries
Intermediaries facilitated 75% of $185B 2023 volume via auctions, bilateral advisory. These players structure secondary transactions, from continuation vehicles to tender offers. They bridge sellers seeking accelerated exits and buyers chasing risk-adjusted returns.
| Firm | AUM | Style | Fees |
| Coller Capital | $20B | auction | variable |
| Lexington Partners | $18B | bilateral | advisory |
| CapZA | $8B | Europe specialist | regional |
Auction processes at firms like Coller maximize seller outcomes through competitive bidding. Bilateral trades, as with Lexington, suit tailored deals for buyout funds or venture capital secondaries. CapZA excels in cross-border secondaries for European assets.
Intermediaries manage pricing dynamics amid supply-demand imbalances. They advise on strip sales and structured equity to optimize IRR enhancement. Investors gain from their expertise in manager selection and vintage diversification.
Expansion of Secondary Funds
Secondary fund AUM grew from $50B (2015) to $250B (2024), 120+ vehicles closed. Fundraising hit a 2023 record $125B raised, average fund $1.2B. This surge reflects strong buyer appetite in a robust fundraising environment.
Fund structures break down as closed-end (80%), evergreen (15%), open-ended (5%). Evergreen funds offer ongoing liquidity for portfolio rebalancing. Closed-end vehicles dominate for long-term commitments in growth equity secondaries.
- Closed-end funds provide committed capital for large LP-led deals.
- Evergreen structures suit family offices needing flexibility.
- Open-ended options attract retail investors via democratized investing.
Dry powder deployment accelerates deal flow in buyout funds and private credit. These expansions mitigate J-curve effects and support capital recycling. Focus on platforms like Partners Group for evergreen exposure to improve Sharpe ratio.
Challenges and Future Outlook
Success in secondary markets for private equity brings new risks. While explosive growth offers liquidity solutions for illiquid assets, concerns like valuation gaps and interest rate impacts loom large. Still, experts see a bullish outlook with expanding investor access and market infrastructure.
Projected volumes highlight the deal flow surge, yet GPs and LPs face pressures from economic uncertainty. Continuation vehicles and tender offers provide accelerated exits, but counterparty risks persist. Balancing these challenges supports ongoing portfolio diversification.
Family offices and high-net-worth individuals increasingly turn to LP-led secondaries for rebalancing. Institutional investors deploy dry powder amid fundraising environments strained by rate hikes. The future points to innovation in trading platforms and due diligence processes.
Addressing NAV discounts and pricing dynamics will shape transaction volumes. Growth in Asia and LatAm promises market expansion, even as recession fears test resilience. Overall, the sector’s evolution favors capital efficiency and IRR enhancement.
Potential Risks and Valuation Concerns
Discounts compressed to 8-10% in 2023 versus historical 15-20%, raising overpayment risk. Valuation lag often trails public marks by 6-12 months, complicating fair value assessments. Buyers must scrutinize EBITDA multiples and comparable transactions.
GP conflicts arise in continuation vehicles, where general partners select assets for transfer. LPs question alignment of interests amid fund restructurings. Due diligence processes demand review of waterfalls and carried interest provisions.
- Examine strip sales for hidden fees and preferred equity terms.
- Assess counterparty risk in bilateral trades and auction processes.
- Verify documentation complexity with legal advisors on indemnities and escrows.
15% of 2022 deals traded above NAV, signaling pricing pressures. Interest rate impacts widen bid-ask spreads and liquidity premiums. Investors mitigate through vintage diversification and manager selection.
Predictions for Continued Expansion
Preqin forecasts $250B+ volumes by 2025, with 20% CAGR through the decade. Aging primary supply and $400B secondary fund capacity fuel demand. Asia Pacific growth and LatAm opportunities drive cross-border secondaries.
Bull case sees $500B volumes by 2028, powered by platforms like Forge Global and EquityZen. Institutional investors and family offices seek portfolio rebalancing via direct secondaries. Democratized investing lowers entry barriers for retail investors.
- Evergreen funds and open-ended structures extend holding periods.
- GP-led secondaries via synthetic secondaries and NAV loans boost liquidity.
- AI-driven pricing and data analytics improve transparency.
Supply-demand imbalance favors buyers amid seller motivations like J-curve mitigation. Private credit and infrastructure funds add diversity. Regulatory frameworks and ILPA guidelines support standardization efforts for sustained growth.
Frequently Asked Questions
What are secondary markets for private equity, and why are they exploding in popularity?
Secondary markets for private equity involve the buying and selling of existing private equity fund interests or portfolio company stakes between investors, rather than new commitments to primary funds. Why secondary markets for private equity are exploding stems from increased liquidity needs amid economic uncertainty, allowing limited partners (LPs) to offload illiquid assets quickly while buyers seek discounted entry points into high-quality portfolios.
Why secondary markets for private equity are exploding: Is it due to liquidity demands from investors?
Yes, one primary reason why secondary markets for private equity are exploding is the surge in liquidity demands. With private equity holdings often locked for 7-10 years, LPs facing redemptions, portfolio rebalancing, or cash flow issues are turning to secondaries to exit positions faster, driving transaction volumes to record highs exceeding $100 billion annually.
How does economic uncertainty contribute to why secondary markets for private equity are exploding?
Economic uncertainty, including inflation, rising interest rates, and geopolitical tensions, has amplified the appeal of secondaries. Investors use these markets to diversify, reduce exposure to underperforming assets, and capitalize on pricing dislocations, explaining why secondary markets for private equity are exploding as a hedging tool in volatile times.
Why secondary markets for private equity are exploding: What’s the role of institutional buyers?
Institutional buyers like sovereign wealth funds, pensions, and specialized secondary funds are fueling growth by acquiring stakes at discounts of 10-20% to net asset value (NAV). Their appetite for yield in a low-rate environment, combined with due diligence advantages, is a key factor in why secondary markets for private equity are exploding.
Are technological advancements a reason why secondary markets for private equity are exploding?
Absolutely-platforms and data analytics have transformed secondaries by enabling faster valuations, broader matchmaking, and transparent pricing. This efficiency lowers barriers for smaller investors and GPs, significantly contributing to why secondary markets for private equity are exploding with volumes doubling in recent years.
What does the future hold for secondary markets, given why they are exploding now?
Looking ahead, continued LP portfolio management needs, GP-led transactions for continuation funds, and regulatory pushes for liquidity will sustain momentum. As private equity assets under management surpass $4 trillion, why secondary markets for private equity are exploding today signals their evolution into a mature, multi-trillion-dollar asset class.