Source: Fortune
Summary
Private equity firms are facing a challenging exit environment due to higher financing costs, tighter credit, and a slowdown in IPO markets. To address this, continuation vehicles (CVs) have become a more prominent part of the private equity playbook. CVs allow general partners to deliver liquidity to existing funds while maintaining exposure to assets with high conviction. They also offer limited partners choice and new investors access to attractive assets. The market for CVs has grown, with $105 billion in GP-led secondary volume in 2025, and is expected to continue to gain momentum.
Our Reading
The numbers tell one story.
Private equity firms are getting creative with exits. Continuation vehicles, once a niche strategy, now account for 84% of the GP-led secondary market. This shift is driven by a desire to maintain exposure to strong assets, deliver liquidity to existing funds, and offer limited partners choice. The result is a growing market for CVs, with $105 billion in volume in 2025. But beneath the surface, a bifurcated market is emerging, with trophy assets on one end and struggling companies on the other. CVs are being used to extend ownership of strong assets, while also providing time and capital for struggling companies to recover. The strategy is not without its risks, but for now, it’s a win-win-win for all involved.
Author: Evan Null
