Continuation funds Q&A: Alignment, conflicts, risks and valuations
As we noted in our article on continuation funds in the lower mid-market , and in our recent video explainer , these deals, also known as GP-led secondaries, have become a key feature in the private equity landscape.
In fact, they have accounted for around half of all secondary market transaction volume annually in recent years – and a new record volume of $71 billion of continuation fund transactions was recorded in 2024.
This has, in turn, made them a topic of keen debate – and there are a number of common misconceptions that we hear regularly when we discuss the opportunities in this fast-growing segment. Here we tackle some of the key questions.
Q: Some have queried whether the growth in continuation funds just reflects private equity managers being unable to generate exits in the current market, particularly if they’re fundraising for a new vehicle and seeking to appeal to clients who might be focused on distributions from the prior fund?
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