9Questions — Marco Busca, Generali — Secondary chances

At a time when exits are lagging and holding periods are longer, it’s no wonder private credit secondaries are booming. Carlyle estimates that the market was worth more than $20bn in 2025, and expects it to grow to over $80bn by 2030. Recent 9fin reporting backs this up, showing Bridgepoint testing the waters with a continuation vehicle after Arcmont and Eurazeo closed their own CVs earlier in the year.

To capitalise on this trend, Generali Investments launched the Generali Private Credit Secondaries Fund in partnership with Partners Group back in April 2025. A little over a year after the launch, 9fin sat down with Marco Busca, head of indirect private debt at Generali Asset Management.

We discussed what is driving the growth in secondaries, how buyers identify genuine opportunities, and how stress can be advantageous to those who do the work.

1. Why are investors finding private credit secondaries increasingly attractive?

A few years ago, private credit was often approached mainly as a yield story. Today, investors are much more focused on functionality inside the portfolio. They want to know how an allocation behaves, how diversified it is, how quickly it produces cash flows, and how much blind-pool risk they are really taking. That is a meaningful shift, because it moves the conversation away from access alone and toward portfolio construction, resilience, and flexibility.

That is where secondaries have become much more relevant. They can offer immediate diversification across managers, borrowers, geographies, and vintages, which is particularly valuable in a market where dispersion is rising. They also tend to provide shorter duration and faster cash flows than a new primary allocation, because the assets are already in place and often further through their life. For investors who want better visibility on how their private credit book is likely to behave, that is very attractive.

For insurers and pension investors in particular, this matters because they are thinking carefully about capital efficiency, liquidity management, and the balance between public and private market exposure. Secondaries are becoming a deliberate portfolio construction tool for investors who want to manage private credit exposure in a more active, flexible, and controlled way.

2. Do you see private credit secondaries moving from opportunistic positions to a more permanent place in portfolios?

Yes, I see this as a structural shift rather than a short-term market trend. Private credit allocations have grown significantly over the past few years, but at the same time exit activity across private markets has slowed and portfolio rebalancing has become more difficult. That means investors are no longer looking at the asset class only through a yield lens. They are thinking much more actively about vintage diversification, duration, liquidity profile, and capital efficiency within their portfolios. The conversation has moved from simply increasing allocations to managing them more deliberately.

For sellers, secondaries provide a practical way to rebalance portfolios, release capital, or refine exposures without waiting for the full life of the fund. For buyers, they offer access to seasoned, income-generating assets with better visibility than a new primary commitment. That matters in a market where investors increasingly want more control over how capital is deployed and when cash flows are likely to return. Increasingly, secondaries should be viewed not just as a liquidity solution, but as a long-term, performance-enhancing building block for institutional portfolios.

More broadly, I think this reflects the fact that private credit is maturing. As the asset class becomes more institutionalised, investors need more ways to manage exposure dynamically rather than simply add to it. Secondaries are increasingly part of that infrastructure, not just a niche side pocket or an opportunistic trade.

3. How do secondaries compare with primary private credit at this stage of the cycle?

The first difference is visibility. In secondaries, the assets are already invested, so you can underwrite on the basis of actual portfolio behaviour rather than just forward assumptions. That usually means less blind-pool risk and better clarity on cash flows, duration, and downside. In a market where dispersion is increasing and the macroeconomic picture is murky, that transparency is highly valuable. It allows investors to form a more grounded view of the portfolio they are buying rather than committing capital to a strategy that still has to be built.

On the return side, secondaries can offer a few additional levers. You may benefit from discounted entry prices, faster distributions, and reduced J-curve effects. That is important because return generation in this part of the market is not just about the underlying loan coupon, but also about discounted entry, quicker deployment, and the ability to buy into a mature portfolio. In some transactions, there can also be structural features that improve returns. So the return profile can be very attractive, especially relative to the level of visibility you get on the underlying assets.

The trade-off, however, is complexity. A primary commitment is simpler in operational terms. In secondaries, you need much deeper diligence, often at asset level, and you need to be comfortable with bespoke structuring, legal work, and execution risk. Secondaries can offer more transparent risk and attractive risk-adjusted returns at this stage of the cycle, but only if you have the platform, the underwriting depth, and the execution capability to do the work properly.

4. What’s driving LP-led versus GP-led secondaries activity?

Both LP-led and GP-led activity are ultimately anchored in the same structural shift: the maturation and institutionalisation of private credit. As private credit allocations grow and exit or distribution cycles lengthen, both investors and managers need more flexible tools to manage liquidity, duration, and portfolio construction. In other words, today’s volumes are not simply a cyclical response to a tougher market; they reflect private credit becoming a larger, more sophisticated, and more actively managed component of institutional portfolios. This is also supported by better data availability and a gradual standardisation of processes, which makes underwriting and execution more scalable.

On the LP-led side, the rationale is straightforward and increasingly structural. LPs sell to rebalance, reduce, or reshape exposure, free up capital for new commitments, respond to regulatory or mandate constraints, or manage liquidity needs without waiting for the full fund life. These motivations exist through the cycle; they can become more visible during stress, but they are not purely cyclical. As a result, the LP-led market is increasingly about portfolio optimisation, not only “forced selling.”

On the GP-led side, the long-term dynamic is the growing use of continuation vehicles and bespoke restructurings as a recurring fund management tool. GPs use GP-led solutions to provide liquidity options to existing investors, extend duration to maximise value realisation, manage concentration, and address fundraising constraints. It’s also valuable for maintaining and optimising their AUM base, while creating a new entry point for incoming investors.

5. What mistakes become more dangerous as capital floods into secondaries?

The first is losing pricing discipline. When more capital is competing for a finite set of opportunities, there is a temptation to accept tighter discounts and more optimistic assumptions around cash flows, recoveries, or timing. In secondaries, that can hurt returns quite quickly. Even small errors at the point of entry can materially change the outcome, so discipline on price matters a great deal. That is particularly relevant in secondaries because discounted entry can enhance returns, but only if the discount reflects genuine value rather than weak underwriting.

The second is shallow underwriting. Some investors will rely too much on manager brand or historic performance and not spend enough time on the underlying assets. That is risky in a market where the quality of portfolios can vary significantly beneath the surface. Fund-level comfort is not enough. You need to understand where the concentrations are, how the assets have been underwritten, how the maturities are distributed, and where the downside could emerge.

Then there is execution risk. These transactions are often bespoke and involve multiple stakeholders. Structuring, legal diligence, and timing are all critical. A weak execution process can undermine what looks like a good investment on paper. The key point is that structuring discipline matters more than speed of deployment. More capital does not inherently increase or reduce risk; it just makes shortcuts more expensive and makes weak processes easier to expose.

6. Does stress make secondaries more attractive or more dangerous?

Stress can create better entry points and more motivated sellers, which clearly makes secondaries more attractive from an opportunity perspective. It can also make relative value easier to identify, because the market becomes more differentiated and assets are less likely to trade on a broad assumption that everything is equally strong. That is one reason why stressed periods can be constructive for disciplined buyers: the opportunity set broadens, but so does the benefit of being able to underwrite mature portfolios with real cash-flow visibility.

At the same time, stress tends to expose weak underwriting very quickly. This is where it is important to distinguish between liquidity risk and credit risk. Some pressure in the market can come from product structure or redemption mechanics without implying a broad deterioration in underlying assets. But stress also reveals where underwriting has been too optimistic, where portfolio construction has been weak, or where managers have relied too heavily on benign conditions and broad market support.

Private credit is certainly not breaking down, but is clearly going through a period of adjustment. We are moving into a phase where fundamentals matter more, asset-level understanding matters more, and superficial diligence is more likely to be punished. That makes secondaries attractive, but only for investors who are selective and can do the work properly. Stress creates opportunity, but it also raises the cost of getting the analysis wrong.

7. What effect is insurance money having on secondaries?

Private credit secondaries are a good fit for insurance capital because they tend to offer shorter duration, earlier cash generation, and better visibility on the underlying assets than a new primary commitment. Those are all attractive characteristics. Because the portfolios are already seasoned, they can often provide a more predictable cash-flow profile, which is important for long-term balance-sheet investors.

Insurer-backed managers can also bring some genuine strengths. They have long-term capital, strong governance, and well-developed risk oversight. In a market like secondaries, where downside protection and asset-level analysis matter a lot, that can be a real advantage. They may also be able to take a more patient approach to deployment, which matters in a market that increasingly rewards selectivity rather than speed.

At the same time, there are constraints. Regulatory capital rules can limit flexibility, and internal decision-making can sometimes be slower in competitive situations. It’s not always an edge for every deal. But, overall, I do think insurer-affiliated platforms are likely to become more active because the characteristics of secondaries line up well with the needs of insurance balance sheets, as well as with the way those investors think about risk and cash-flow visibility.

8. What separates experienced private credit secondary investors from newer entrants?

It comes down to judgement, process, and underwriting depth. In a benign market, it is easier to rely on headline manager reputation or broad market beta. In a more dispersed market, that becomes much less effective.

Experienced secondary investors work at asset level, not just fund level. They look closely at borrower fundamentals, covenant quality, maturity profile, sector concentration, recovery dynamics, and where the downside really sits. In a market that is becoming more institutionalised, repeatable underwriting quality matters much more than simply having access to capital. That is increasingly important because tail risks are often embedded in specific loans, invisible in high-level summary numbers.

Experience in primary private credit also matters. It gives you context on how underwriting standards have evolved, how managers behave across cycles, and what different vintages really mean. That historical perspective is difficult to replicate quickly, but it becomes very valuable when the market is no longer forgiving, as we are seeing at the moment. It helps investors distinguish between a genuinely attractive seasoned portfolio and one that simply looks good on the surface.

The other differentiator is execution. The more experienced platforms are usually better at sourcing complex opportunities and completing them with the right structuring and governance discipline. This remains very much a people business. Stability, alignment, and repeatable underwriting matter more than scale on its own. In a market like this, the quality of the team and the consistency of the process become much more visible.

9. What’s the rationale behind your joint initiative with Partners Group?

In a market like private credit secondaries, a partnership only works if it is genuinely complementary. In our case, the rationale is practical: combining origination, underwriting, and fund-investing capabilities on our side with Partners Group’s institutional knowledge across private credit markets and secondaries.

Different perspectives can strengthen the investment process if they are aligned from the start. An LP mindset brings a strong focus on portfolio construction, liquidity management, and long-term capital allocation. A specialist GP brings execution experience, market access, and the ability to work through complex transactions in a hands-on way. If those capabilities are genuinely complementary, the result can be stronger than either side working alone.

You can improve sourcing, sharpen underwriting, and create better alignment between capital, skill set, and time horizon. That is especially important in secondaries because the opportunity set is diverse and execution can be demanding. In a specialised market like secondaries, strategic fit is only part of the equation. What ultimately matters is whether a partnership truly improves access, strengthens judgement, and enhances execution.