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The story so far
The continuation vehicle market has reached unprecedented scale. GP-led transactions accounted for 12% of all private equity exits in 2024, rising to 15% in the first half of 2025. According to Evercore, secondary transaction volumes reached an all-time high of $160 billion, with the first six months of 2025 already totaling $102 billion—up from $72 billion in the same period last year.
Raluca Jochmann from Allianz Global Investors explains the drivers:
"Secondaries [can be used] as a strategic asset allocation tool. So very good, risk return profile, very diversified, quick distributions. However, we also see it as a tactical tool. Especially in the last couple of years with the big discounts we've seen, it was an easy, kind of no brainer trade to not allocate to primaries, but allocate more to secondaries."
At this pace, the market is poised to break the $200 billion barrier, fundamentally reshaping how LPs approach portfolio management and liquidity planning.
The challenge isn't just evaluating individual transactions—it's developing systematic frameworks to identify which continuation vehicles will deliver buyout-level returns and which represent GPs extending fund lives without compelling value creation stories.
Valerie Handal, HarbourVest comments:
"GP-led transactions have become about half of the total secondary markets in each of the last five years. And in 2025 they continue to be a significant part of the market. We think that as familiarity and acceptance of GP-leds increase, they will continue to be one of the potential exit routes that GPs more systematically consider for their businesses."
More than three-quarters of the top 100 GPs have already accessed the continuation market, with mid-market players increasingly entering the space. These managers are seeking to lock in further alpha from mature assets that they wish to avoid prematurely selling as existing funds wind down.
The market dynamics reveal a strategic shift. Continuation vehicles are no longer emergency liquidity measures—they're systematic tools for extending hold periods on high-performing assets. This evolution creates both opportunities and challenges for institutional investors navigating an increasingly complex decision matrix.
Looking for diamonds in the rough
The appeal of continuation vehicles centers on their potential asymmetric risk-return profile. According to HarbourVest analysis, these transactions offer several sources of alpha: positive selection bias toward high-performing portfolio companies, mitigated change-of-control or blind pool risk, and transaction structures designed to optimise GP-LP alignment.
Handal from HarbourVest comments:
"The market is now mature enough that you are seeing realised performance of single asset CVs that suggests these are good assets. With active selection, the market data indicates that you can generate buyout-type returns in these GP-led opportunities with lower risk."
However, the pricing environment suggests the market may be getting ahead of itself. With 52% of GP-led transactions priced at or above par in the first half of 2025—up from 41% the previous year—LPs face the challenge of identifying genuine value opportunities in an increasingly competitive landscape.
The distinction between single-asset and multi-asset continuation vehicles adds another layer of complexity. Single-asset CVs offer "buyout-like returns" with concentrated exposure to proven performers, while multi-asset CVs provide "more secondary-like characteristics and returns" with regular cash flows but mixed performance across portfolio companies.
This structural differentiation requires LPs to align their continuation vehicle strategy with broader portfolio objectives—a sophisticated exercise that many institutions are still developing.
Takeaways
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Asymmetric risk profiles are attractive → Mature trophy assets offer lower downside risk with potential for buyout-level returns, but pricing at or above par requires careful fundamental analysis.
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Structure matters for returns → Single-asset CVs can deliver concentrated buyout-like performance while multi-asset vehicles offer diversified, secondary-like characteristics with regular cash flows.
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Capability gaps are emerging → Many LPs lack the internal bandwidth and expertise to properly evaluate the unprecedented volume of continuation vehicle opportunities.
Vote
What skills are you developing to evaluate single-asset opportunities?
- Valuation and pricing methodology
- Portfolio management
- Operational due diligence
- Sector knowledge
- GP track record
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