Guide to continuation funds: A market that has come of age
A headline theme across private markets over the past several years, driven by inflationary and interest rate pressures, has been the slowdown in deal and exit activity.
At the same time, there has been significant attention on the rise in secondaries as an investment theme. The secondaries market recorded $160 billion in transaction volume globally in 2024, a new annual record, and is positioned strongly as we move through 2025.
This reflects the continuation of a longer-term trend: as the private equity market matures and expands, the secondary market has similarly continued to grow and evolve. Meanwhile the demand for liquidity from private equity investors has only increased of late, driven by the notable decrease in exits and distributions.
Coinciding with the growth of secondaries has been that of continuation fund transactions, otherwise referred to as ‘GP-led secondaries’. These deals enable private equity managers to offer liquidity to existing investors, while at the same time extending the hold period of high-quality assets in their portfolio, backed by new capital.
Continuation funds have become a key growth driver within the secondary market, accounting for 45-50% of deal volumes over the past several years – and similarly recording a record total for transaction volume in 2024, of more than $70 billion (see chart).
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