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Secondaries are thriving after years of being a bit of a backwater, and are unlikely to stall anytime soon, Mustafa Siddiqui, SQ Capital founder and CEO, tells Axios Pro.

Why it matters: The secondaries market has grown 39% year-over-year.

Driving the news: Siddiqui, a former Blackstone exec, founded the firm in January.

Liquidity will still be needed, even when the M&A and IPO markets return fully, Siddiqui says.

He declined to disclose how much the firm has raised to date.

This Expert Voices interview was edited for length and style.

Why are secondaries having such a moment right now?

"Exit activity has dramatically slowed down. M&A activity is down, IPO activity is way down. So, LPs and GPs are short on liquidity.

The drought continues ... and to some extent, there's capitulation on the part of LPs."

Five years ago, what did the industry think of secondaries?

"Five years ago, a lot of people couldn't spell secondaries, candidly.

It used to be that a 'continuation vehicle' used to be called a 'GP-led restructuring.'

Restructuring is, generally speaking, not a happy term, and that's what it was. It wasn't a happy place to be if you were doing a GP-led restructuring for one of your funds."

You founded a secondaries firm in January. Why?

"It's very rare to see a market opportunity that is this big and this out of balance in terms of the opportunity set and how that's growing versus the capital that's available to service it.

All those dynamics are amplified in the middle-market, which is, I think, largely overlooked and neglected by the traditional kind of incumbent secondaries players."

Is there an inefficiency or a gap that you believe you've recognized?

Investors "tend to overlook what I describe as the long tail of the middle market, which is some 2000 middle-market funds out in the private equity world, versus 50-or-so of these large cap names."

As you've said, right now LPs need liquidity. What happens when the M&A market picks up? Will secondaries still be hot?

"Secondary market activity will continue to grow because [of a] need for liquidity — CIOs of institutions change. The new CIO wants to put their own imprimatur on the portfolio. So, out with the old, free up cash and reinvest.

Strategic asset allocations change. They want to shift their portfolio and that often leads to secondary sales to change the portfolio composition to free up cash to reposition the portfolio, and so on and so on.

And by the way, it'll take years to return to normal M&A and exit activity, before the current backlog of un-exited portfolio companies is fully worked through."

Q&A: SQ Capital founder on secondaries' staying power

The secondaries market has grown 39% year-over-year.

Photo illustration of Mustafa Siddiqui next to colorful squares and a pattern of SQ Capital logos.

Photo illustration: Axios Visuals. Photo: Courtesy of SQ Capital

<a class="gtmContentClick" data-vars-link-text="Secondaries are thriving" data-vars-click-url="https://www.axios.com/pro/merger-deals/2025/06/05/secondaries-exits-ma-private-equity" data-vars-content-id="2b09e5b5-654c-4c05-ad07-d95cbfffa21f" data-vars-headline="Q&amp;A: SQ Capital founder on secondaries&#x27; staying power" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/merger-deals/2025/06/05/secondaries-exits-ma-private-equity" target="_self">Secondaries are thriving</a> after years of being a bit of a backwater, and are unlikely to stall anytime soon, Mustafa Siddiqui, SQ Capital founder and CEO, tells Axios Pro.Why it matters: The secondaries market has grown 39% year-over-year.

Q&A: SQ Capital founder on secondaries' staying power

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