Hamilton Lane Rejects 90% of Deals in $240 Billion Secondary Boom

Hamilton Lane, an investment manager overseeing roughly $1 trillion in assets, turns down more than 90% of the secondary-market deals it evaluates — sometimes as much as 98%. Keith Brittain, Co-Head of the firm's Secondary Investment team, delivered that figure in an interview with Calcalist during a visit to Israel, where Hamilton Lane has deployed about $1.5 billion since it began operating in the country.

Brittain puts the math bluntly. Last year the global secondary market saw $240 billion in transactions. His firm evaluated roughly double that volume. "The market has simply exploded," he says. When he joined Hamilton Lane in 2010, annual secondary transaction volume stood at about $10 billion — a 24-fold increase over roughly 16 years.

Why are investors selling private shares in bulk?

The traditional exit route has narrowed. Founders increasingly view an IPO as costly and demanding, while many private companies choose to stay private longer. The result: employees, founders, early-stage investors and limited partners in venture funds all want liquidity without waiting for an acquisition or a listing.

Secondary funds buy shares on the private market, typically at a discount to a company's latest funding-round valuation. In deals where Hamilton Lane acquires investor stakes in venture capital funds, Brittain says the average discount currently runs 20% to 25%. Direct share purchases carry a much broader discount range.

A cheap price alone doesn't close the deal. "A low price alone doesn't always solve the problem; sometimes, the price simply cannot be low enough to generate a solid return," Brittain says. "We, however, look for companies that we believe will increase in value over time. We evaluate both the quality of the company itself and the quality of the fund manager."

What has Hamilton Lane done in Israel?

The firm has operated in Israel for over 20 years. Since October 7, it has invested approximately $470 million across all its channels, bringing cumulative investments to about $1.5 billion. In the secondary market specifically, Hamilton Lane invested in the venture capital fund Vgames, providing liquidity to some of its investors. It also completed fund-manager-led transactions giving it exposure to Wiz, Pentera and CyberArk — including before their public listings.

Hamilton Lane recently raised about $5 billion for its sixth secondary fund, part of a broader platform managing approximately $20 billion. Brittain's visit has two stated goals: meeting local high-tech companies and venture funds Hamilton Lane is considering investing in, and meeting the institutional investors from whom the firm raises capital.

Brittain says deal sizes can range from approximately $5 million to over $100 million, and the firm isn't limited to one transaction type. It targets funds needing liquidity, shareholders wanting to sell, and venture managers looking to move one or two portfolio companies into a new vehicle. It can also provide fresh capital for R&D teams, sales organizations or acquisitions.

Is it a buyer's market?

Yes, by Brittain's account. Capital available for secondary investment falls short of the opportunity set, letting buyers handpick deals. For the market as a whole, he argues, more capital is needed to give a larger number of investors an exit.

The imbalance is starkest in technology. PitchBook data cited in the report puts potential share supply in the tech sector at $10 trillion, against annual secondary transaction volume of approximately $240 billion in 2025.

Underneath sits a distribution problem. Over the past 25 years, an average of about 22% of net asset value was returned to fund investors annually. Over the past three or four years, that has dropped to 10%-15%. Fund managers hold companies longer, creating what Brittain calls a large backlog of assets: investors want to cash out, but the funds aren't ready to sell. He confirms 2024 and 2025 were peak years for secondary activity, and 2026 could match or surpass that peak.

Does the venture model survive?

Brittain believes it does. "I believe the venture capital industry will continue to exist," he says. But returns show significant disparities between the best managers and the weakest, making manager selection critical — a key point for Hamilton Lane's institutional clients.

He also frames the IPO drought as partly structural rather than cyclical. "I believe this is a long-term shift. The number of public companies has shrunk over the years, and the dream of going public is no longer shared by everyone." Even in 2020 and 2021, he notes, IPOs accounted for a low percentage of total exits; most companies are sold via M&A.

On the anticipated Anthropic IPO, expected in the coming weeks, Brittain sees a milestone. "A successful IPO would demonstrate that there is an exit path even for very large private companies," he says, predicting a self-reinforcing cycle of fresh capital, innovation and entrepreneurship.

AI is already reshaping the secondary market itself. Employees at OpenAI and Anthropic have grown wealthy selling shares to funds like Hamilton Lane, while managers hold onto AI winners and offload "pre-AI" holdings. Brittain's filter stays the same: some companies will pivot, some will make acquisitions, some won't survive. His team weighs the quality of the business, the fund manager's outlook, and whether that manager intends to stay invested — or is simply dumping the asset.