For decades, private market investors had one persistent frustration: no easy way out. Lock-up periods often stretched 5–10 years, leaving capital trapped until a company went public or was acquired. But in 2025, a new era is emerging. The secondary market for private assets—once dominated by billion-dollar institutional block trades—is going digital, opening new liquidity pathways for retail investors.
In the first half of 2025 alone, global secondary trading volume for private assets reached $144 billion, up 36% year-over-year. Much of this growth is being driven by fractionalization, digital matching engines, and scheduled redemption programs that cater to a growing class of retail investors.
Key Insight: Liquidity Is the New Differentiator
Retail investors are increasingly drawn to private markets for the potential of higher returns and diversification—but they are wary of illiquidity. Platforms that can deliver predictable liquidity windows or enable peer-to-peer secondary transactions are rapidly gaining traction.
This is driving innovation in three key areas:
- Fractional Secondary Trading
- Scheduled Redemptions
- Digital Matching Engines
Data Point: $144B and Growing
According to Jefferies’ 2025 Secondary Market Report, secondary trading volumes are on track to exceed $300 billion by year-end. While institutional portfolio sales still dominate, retail and mass-affluent participation has grown 4x since 2022, supported by technology platforms and regulatory evolution.
What’s Changed?
The Role of Capital Engine® in Building Trust & Market Depth
Capital Engine® infrastructure is designed to help broker-dealers, fund managers, and marketplaces facilitate compliant, scalable primary and secondary trading for private assets.
Our aim is a multi-layered approach ensuring that liquidity innovation is matched with regulatory discipline:
- Fully Integrated Investor Onboarding instant KYC/AML, accreditation checks, and suitability assessments ensure only eligible investors access offerings.
- Fractional Trading Capabilities allowing issuers and funds to break down positions into investor-friendly ticket sizes.
- Embedded Settlement & Custody Integration partnering with regulated custodians and transfer agents to safeguard assets and ensure seamless transaction settlement.
- Transparent Pricing Frameworks incorporating third-party valuation data, AI-driven price modeling, and bid/ask tracking for fair market execution.
Visual: How Digital Secondaries Trading Works
Why This Matters for Retail Investors
The ability to exit or rebalance positions:
- Reduces perceived risk in private market participation
- Attracts new investors who value optionality
- Encourages repeat investing as liquidity confidence grows
For issuers and fund managers, offering a secondary liquidity program can:
- Differentiate their product in a crowded market
- Increase fundraising velocity
- Build long-term trust with investors
The Long-Term View
By 2030, secondary liquidity is expected to be a standard feature of private market investing—much like mutual fund redemption rights today. Platforms that can blend institutional-grade execution with retail-friendly interfaces will dominate this space.
Capital Engine® is investing in exactly that future—building the market depth, compliance framework, and fractional trading capabilities to make secondary liquidity a reality for every qualified investor.
EXPLORE PRIVATE MARKET INVESTMENTS
Private Markets This Month
Private credit must pay for its slice of capital market pie Private credit is muscling in on investment grade credit. But the acid test will be whether it can compete on price. READ MORE
How private capital can provide a blueprint for impact when global aid is in decline While philanthropy addresses urgent needs, shrinking aid and growing demand mean we must go beyond charity. Purpose-driven investment isn’t just effective, it’s essential. READ MORE
Will Private Equity Be Able to Gain Enough Retail Capital to Maintain Its Growth plus, how fund managers are balancing different levels of liquidity of private market assets as the landscape evolves. READ MORE
Private Capital in Focus: 2025 Trends to Watch Private capital — spanning debt, equity and real assets — has rapidly expanded over the past decade and enters 2025 with USD 2 trillion of dry powder.[1] These markets also go into the year faced with challenges, unknowns, as well as some grounds for optimism. READ MORE
In the Engine Room Podcast
Up Next: Tokenization: Beyond the Hype — Separating blockchain buzz from real-world applications in private market investing. If you missed any of the earlier issues, you can catch up at: www.capitalengine.io/newsletter
Interested in learning more about Capital Engine® - Request a Demo
Subscribe on LinkedIn to the Private Capital Pulse newsletter to stay ahead of the curve in the evolving world of private investments.
