Schroders
February 03, 2025
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Why the lower mid-market offers compelling continuation fund opportunities

A headline theme across private markets over the past two 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 $160bn in transaction volume globally in 2024, a new annual record, and is positioned strongly for the coming year.

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. Demand for liquidity from private equity investors has only increased, driven by the notable decrease in exits and distributions during the past couple of years.

Coinciding with the growth of secondaries has been that of continuation fund transactions – otherwise referred to as ‘GP-led secondaries’ – that enable existing managers to extend the hold period of their highest-quality assets, 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 (see chart).

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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.



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