Inside the Growing Market for Real Estate Secondaries: Why ADIA and Ardian Are Teaming Up
Global real estate investment is undergoing a period of adjustment. Rising interest rates, shifting property values, and a slowdown in traditional dealmaking have pushed investors to look for new ways to buy and sell assets. One strategy gaining momentum is the secondary market for real estate investments, where existing stakes in property funds or portfolios are sold before their original investment cycle ends.
Against this backdrop, Abu Dhabi’s sovereign wealth fund ADIA and the French investment firm Ardian have joined forces to pursue opportunities in this emerging market segment. Their partnership aims to target real estate secondaries—transactions involving the resale of existing property fund stakes or portfolios.
The move reflects a broader shift in global finance, where investors are increasingly focused on liquidity, flexibility, and the ability to adapt to rapidly changing property valuations.
This article explains what the real estate secondaries market is, why it is expanding, how the ADIA–Ardian partnership fits into broader financial trends, and what the development could mean for investors and the global property sector.
Understanding Real Estate Secondaries
What Are “Secondaries” in Private Markets?
In traditional private market investments—such as private equity, infrastructure, or real estate—investors typically commit money to a fund for a long period, often 10 years or more. During that time, the capital is locked in while managers buy, develop, and eventually sell assets.
The secondary market allows investors to sell their stakes in these funds before the end of the investment cycle. Another investor buys the stake, usually at a negotiated price based on current market conditions.
In real estate, this could involve:
- Selling a stake in a private real estate fund
- Selling a portfolio of property investments held within a fund
- Transferring interests in real estate partnerships
These transactions provide liquidity to investors who want to exit early while giving buyers access to existing assets that may already be generating income.
Research on private markets notes that secondaries have become an important mechanism for providing liquidity and helping investors rebalance portfolios that might otherwise remain illiquid for years.
The Organizations Behind the Partnership
ADIA: A Major Sovereign Wealth Investor
The Abu Dhabi Investment Authority (ADIA) is one of the world’s largest sovereign wealth funds, managing hundreds of billions of dollars in assets. It invests globally across asset classes including equities, infrastructure, private equity, and real estate.
Sovereign wealth funds like ADIA often seek long-term investments to diversify national wealth beyond oil revenues. Real estate has historically been a key part of that strategy.
However, even large long-term investors increasingly value liquidity and flexibility, making secondary markets more attractive.
Ardian: A Global Private Investment Firm
Ardian is a Paris-based private investment firm managing about $180 billion in assets across private equity, real assets, and credit strategies.
Founded in 1996, the firm has become one of the world’s largest investors in the secondary market for private investments, buying portfolios of fund interests from institutional investors seeking early exits.
Ardian’s experience in secondaries makes it a natural partner for institutional investors looking to enter the space.
Why Real Estate Secondaries Are Growing
1. Market Volatility and Valuation Resets
The global property market has experienced a period of uncertainty in recent years due to:
- Rising interest rates
- Changes in office demand after the pandemic
- Regional economic slowdowns
- Shifts toward logistics, residential, and alternative property sectors
As property valuations adjust, some investors want to sell existing positions rather than wait years for market recovery.
Secondary buyers can purchase these stakes at discounts, potentially benefiting if valuations stabilize or recover.
2. Liquidity Needs Among Institutional Investors
Many institutional investors—such as pension funds, insurance companies, and endowments—allocate large portions of their portfolios to private assets.
However, during periods of market stress or changing investment strategies, they may need to reduce exposure quickly.
Secondaries allow them to:
- Free up capital
- Rebalance asset allocation
- Reduce risk in certain sectors or regions
Because traditional private real estate funds can lock capital for a decade or longer, secondary markets have become a critical liquidity channel.
3. Increasing Scale of Private Markets
Over the past two decades, private markets—including real estate funds—have grown dramatically.
As the industry expanded, so did the volume of assets tied up in long-term structures. This growth naturally created demand for a resale market for those investments.
Today, secondaries are no longer seen as distressed sales. Instead, they are often strategic portfolio management tools.
How the ADIA–Ardian Strategy Works
The partnership between ADIA and Ardian aims to build a platform focused on real estate secondaries opportunities.
In practical terms, the strategy could involve:
- Buying stakes in existing property funds
- Acquiring portfolios of real estate assets indirectly through funds
- Participating in continuation vehicles, where fund managers transfer assets into new funds to extend their ownership
Advantages of This Approach
Real estate secondaries offer several potential benefits compared with traditional property investment:
- Greater transparency: Assets are already operating and generating data
- Shorter holding periods: Investors enter mid-cycle rather than at the beginning
- Pricing opportunities: Stakes may be purchased at discounts if sellers need liquidity
For large institutional investors, this can create a more flexible path into real estate markets.
Types of Real Estate Secondary Transactions
The secondaries market includes several different structures.
| Transaction Type | Description | Typical Participants |
|---|---|---|
| LP Stake Sales | Limited partners sell their stakes in a real estate fund to another investor | Pension funds, sovereign wealth funds |
| Portfolio Sales | Bundles of fund interests or property investments are sold together | Institutional investors, private equity firms |
| GP-Led Transactions | Fund managers restructure assets into new vehicles to extend ownership | Asset managers, secondary funds |
| Continuation Funds | Investors roll assets into new funds to continue managing properties | Existing investors and new buyers |
These structures allow capital to move more freely within the private real estate ecosystem.
Historical Context: The Rise of Secondary Markets
Early Days of Private Equity Secondaries
Secondary markets first emerged in the private equity industry in the 1990s, when investors sought ways to exit long-term investments early.
Initially, the transactions were small and often involved distressed sellers.
But over time, specialized funds and asset managers began focusing on secondaries as a core investment strategy.
Today, the sector is massive.
Ardian itself has raised some of the largest secondaries funds in history, including a $30 billion fund dedicated to buying stakes in private investments.
Expansion Into Real Assets
As secondaries proved successful in private equity, the concept expanded to other asset classes:
- Infrastructure
- Credit
- Venture capital
- Real estate
Real estate secondaries are still smaller than private equity secondaries but are growing quickly.
The increasing complexity of property markets—and the growing scale of private real estate funds—has accelerated this trend.
Who Is Affected by This Market
Institutional Investors
Large institutions are the primary participants in the secondaries market.
These include:
- Pension funds
- Sovereign wealth funds
- Insurance companies
- University endowments
For them, secondaries provide a mechanism to manage exposure to private assets.
Real Estate Fund Managers
Fund managers benefit from secondaries because they allow:
- More flexible capital structures
- Extended ownership of assets through continuation funds
- Additional liquidity for investors
However, they must balance these benefits with concerns about valuation transparency and investor fairness.
Property Markets
While the secondaries market mainly involves financial transactions, it can also influence the broader real estate industry.
For example:
- Property ownership may shift between investment groups more frequently.
- Assets might be held longer if continuation funds extend ownership periods.
- More capital could flow into sectors with strong demand, such as logistics or residential housing.
Why Sovereign Wealth Funds Are Interested
Sovereign wealth funds like ADIA are increasingly active in private markets for several reasons.
Diversification Beyond Public Markets
Public equities and bonds can be volatile, especially during periods of economic uncertainty.
Private assets—including real estate—offer:
- Potentially stable long-term income
- Portfolio diversification
- Access to infrastructure and property sectors
Secondaries allow these funds to enter investments at different stages, potentially improving diversification.
Strategic Partnerships
Rather than building every capability internally, sovereign wealth funds often partner with experienced investment firms.
Working with Ardian gives ADIA access to:
- Established deal networks
- Data and analytics on private assets
- Experience evaluating complex portfolios
Risks and Challenges
Despite their growing popularity, real estate secondaries come with challenges.
Valuation Uncertainty
Determining the fair value of a stake in a private real estate fund can be difficult because:
- Properties may not be frequently revalued
- Market conditions may change quickly
- Data may be limited compared with public markets
Market Liquidity
Although secondaries provide more liquidity than traditional private investments, the market is still relatively specialized.
Large transactions may take time to negotiate and close.
Economic Cycles
Real estate markets are cyclical.
If property values decline significantly, secondary buyers may face losses.
Potential Future Developments
The partnership between ADIA and Ardian highlights broader trends shaping private markets.
Continued Growth in Secondaries
Industry analysts expect the secondaries market to continue expanding as:
- Private asset allocations grow
- Institutional investors seek greater flexibility
- More specialized funds enter the space
Increased Institutional Participation
More sovereign wealth funds, pension funds, and family offices may begin investing in secondaries.
This could bring additional capital into the market and increase transaction volumes.
Greater Market Transparency
As the market matures, new technologies and data tools may improve pricing transparency and deal execution.
Better analytics could make it easier for investors to evaluate complex portfolios of private real estate assets.
The Bigger Picture
The collaboration between ADIA and Ardian reflects a broader transformation in how global capital moves through private markets.
Traditional investment structures once locked capital into decade-long commitments with limited flexibility. Secondary markets are gradually changing that dynamic, allowing investors to enter and exit private investments more fluidly.
In real estate, this shift could reshape how property funds operate and how institutional investors allocate capital.
While the secondaries market is still evolving, partnerships like this one signal growing confidence in its long-term potential.
As private assets continue to represent a larger share of global investment portfolios, the ability to trade those assets efficiently—through markets such as real estate secondaries—may become increasingly important for investors worldwide.
Reviewed by Aparna Decors
on
March 10, 2026
Rating:
