Majority of mid-market private equity firms will deploy CVs equal to 50% or more of their flagship funds in 2025, according to Lazard's latest report. This shift reflects GPs' strategies to retain trophy assets while generating liquidity, with CV-on-CV transactions expected to rise as a key mechanism. The trend signals heightened demand for secondary market deals among institutional investors seeking exposure to established platforms without full-fund commitments. Lazard's analysis indicates this represents a structural change in how mid-market sponsors manage portfolio companies and investor relations. The implications are significant for placement agents and law firms facilitating these transactions, as the volume of CV deals could redefine secondary market dynamics in 2025.

This development stems from GPs' dual objectives: preserving control over high-performing assets while meeting liquidity needs. Mid-market firms face pressure to demonstrate value to limited partners, making CV structures attractive for balancing growth and cash returns. The report suggests institutional investors are increasingly comfortable with CV structures, viewing them as lower-risk entry points compared to full-fund acquisitions. The rise of CV-on-CV deals further complicates the landscape, as secondary transactions involving CV assets could create layered ownership structures requiring sophisticated legal and financial engineering. Lazard's findings underscore the need for enhanced due diligence frameworks in this evolving market segment.

For investors, the trend means greater flexibility in portfolio construction but also heightened scrutiny of CV structures' long-term viability. The 50% threshold represents a critical benchmark for assessing mid-market GPs' liquidity strategies, with firms exceeding this level likely to attract more institutional interest. The broader market impact could include increased competition for trophy assets and potential consolidation among smaller GPs unable to match the liquidity profiles of larger players. Lazard's report positions this as a pivotal moment for the secondaries market, where CV structures may become the default liquidity tool for mid-market sponsors