Continuation funds: What are they, and why now?
Continuation funds, otherwise known as GP-led secondaries, have become a key investment trend in the private equity landscape, accounting for between 45-60% of all global secondary market deal flow in each of the last five years.
Of the record total of $160 billion worth of secondaries deals completed in 2024, $71 billion was accounted for by continuation funds – itself a record total.
In a new video interview, the first in the three-part series, Christiaan van der Kam, Head of Secondary Investments at Schroders Capital, explains why continuation funds have become such a popular liquidity solution for fund managers – and why we believe the market will continue to expand in the years to come.
Among other things he discusses:
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What continuation funds are, and how these transactions are structured and executed
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How these deals provide a valuable liquidity option for existing investors – and a new lease of investment life for underlying investee companies
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Why GP-led transactions offer a compelling opportunity for secondary investors, with the benefits of traditional secondaries risk mitigation
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How a shortage of exits has propelled the segment in recent years – and long-term growth drivers related to fundamental limitations of private funds.
Look out for parts two and three in the series, which will delve into the specific continuation fund opportunities that can be found in the lower mid-market, and highlight a case study showcasing how these deals can provide access to compelling growth companies.
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Schroder Investment Management North America Inc. (“SIMNA”) is an SEC registered investment adviser, CRD Number 105820, providing asset management products and services to clients in the US and registered as a Portfolio Manager with the securities regulatory authorities in Canada. Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and as an Exempt Market Dealer with the securities regulatory authorities in Canada. SFA markets certain investment vehicles for which other Schroders entities are investment advisers.
Schroders Capital is the private markets investment division of Schroders plc. Schroders Capital Management (US) Inc. (‘Schroders Capital US’) is registered as an investment adviser with the US Securities and Exchange Commission (SEC).It provides asset management products and services to clients in the United States and Canada.For more information, visit www.schroderscapital.com
SIMNA, SFA and Schroders Capital are wholly owned subsidiaries of Schroders plc.
