Record GP-led continuation vehicle volume is drawing sharper scrutiny from major buyers, as investors warn that deal quality is becoming increasingly uneven. At the same time, CFOs and other financing structures are expanding the liquidity toolkit, reshaping how private equity assets find exits.
CV Quality Concerns
As GP-led secondaries volume has surged to record levels, some of the market’s largest buyers are beginning to raise concerns about deal quality.
Partners Group, one of the world’s most active secondaries investors, recently warned that the quality of continuation-vehicle opportunities remains uneven and said it is applying heightened scrutiny when evaluating transactions. The comments stand out because few firms see as much GP-led deal flow as Partners Group, which has become a major provider of capital to continuation funds and other secondary transactions.
The firm’s message reflects a growing debate inside the industry.
Continuation vehicles are touted as a way for sponsors to hold onto trophy assets in maturing funds. The businesses moved into a CV are marketed as outperforming expectations but needing additional time to compound value. Investors broadly accepted the logic: keep backing a winner rather than sell it prematurely.
Earlier this year, the London-based firm closed its flagship secondaries fund at $17 billion, marking its largest fundraising to date. Much of the fund is focused on finding those trophy assets.
That dynamic is becoming harder to maintain as the market expands.
GP-led transaction volume has grown dramatically over the past five years. Coller says CV volume hit a record $108 billion in 2025, up from $77 billion in 2024 and more than 13 times the $8 billion recorded a decade ago.
With traditional M&A activity and IPO markets remaining subdued, many sponsors have turned to continuation vehicles as an alternative source of liquidity.
The result is a larger and more diverse universe of assets coming to market.
Secondary investors say the best transactions remain highly sought after, particularly those involving market-leading companies with clear growth prospects and strong alignment between existing and new investors. Competition for those deals remains intense, often driving pricing close to or above net asset value.
At the same time, buyers report seeing a growing number of transactions involving assets that may have struggled to attract interest through a conventional sale process. In some cases, investors question whether continuation funds are being used to extend ownership of exceptional companies or simply delay difficult exit decisions.
That distinction is becoming increasingly important as limited partners devote more capital to GP-led opportunities.
Investors have generally become more sophisticated in evaluating continuation vehicles, paying closer attention to valuation methodologies, governance structures and the amount of capital general partners commit alongside new buyers. Several large secondary firms say they are rejecting a growing share of opportunities despite record deal flow.
The concern is not that continuation funds are losing relevance. Most market participants expect GP-led transactions to remain a permanent feature of private equity.
Rather, the question is whether the industry’s rapid growth is creating a widening gap between the highest-quality deals and everything else.
First Take: Nigel Dawn, Evercore’s head of GP-led advisory, says only half of the single asset CVs brought to market actually close, suggesting investors remain selective and are largely still backing trophy assets.
CFOs Go Mainstream
Collateralized fund obligations, or CFOs, are emerging as one of the fastest-growing segments of the secondaries market. The esoteric vehicle allows GPs to borrow against their portfolios in yet another way to generate liquidity beyond exits.
Once a niche financing tool used by a small group of sophisticated investors, CFOs are rapidly moving into the mainstream.
Evercore expects volume to exceed $30 billion this year, up 50 percent from 2024 and a sharp increase from recent years. Evercore says the increased volume is the latest sign of growing demand for liquidity across private markets.
The structures work by bundling private fund stakes as collateral into rated debt instruments. Last year, new capital rules from the National Association of Insurance Commissioners took effect, clarifying the regulatory treatment of these securities and enabling insurers to expand their exposure.
Secondary buyers have spent years building a business around price discovery. CFOs sidestep that exercise. A manager who securitizes fund stakes rather than selling them avoids the discount conversation, at least for now. Whether the underlying assets support the debt structure becomes a question for rating agencies rather than a motivated buyer.
The roster of issuers has moved well beyond early adopters.
- Blackstone Strategic Partners, the PE titan’s secondary unit, is marketing a $2 billion CFO.
- Pantheon closed a $1 billion CFO this month that exceeded its target by a third.
- Vista Equity Partners tapped Goldman Sachs late last year to arrange a $1 billion CFO.
- Churchill Asset Management, Nuveen’s secondaries arm, closed a $750 million CFO, its third.
- Carlyle’s Alpinvest launched a $1.25 billon CFO in late 2024.
- Coller Capital, with backing from Ares and Barings, closed a $2.4 billion fund to invest in CFOs.
Carlyle’s AlpInvest unit has taken the vehicle to another level. Bloomberg reports the firm’s secondaries team created a first-of-its-kind financing tool closely related to a CFO that will commit more than $5 billion to seed its next flagship buyout fund while repaying investors in some of its older vintages
Takeaway: For secondaries professionals, the more pointed question is whether CFOs are absorbing deal flow that would otherwise reach the secondary market. The honest answer is probably some of it.
Petershill’s Victory Lap
Goldman Sachs’ Petershill platform has spent the past year arguing that public markets failed to recognize the value of its portfolio of minority stakes in alternative asset managers.
Its latest exit offers another piece of evidence.
Petershill announced the sale of its stake in infrastructure investor ArcLight Capital Partners, marking the ninth realization since the beginning of 2024. Petershill says it generated proceeds at a premium to the asset’s carrying value.
The transaction follows full exits from Arctos Partners, Industry Ventures, Harvest Partners, General Catalyst and LMR Partners, as well as partial sales of stakes in Incline Equity Partners, Accel-KKR and Willow Tree Credit Partners. According to the firm, realization and financing activities have generated roughly $3.6 billion in proceeds since early 2024.
Viewed in isolation, ArcLight is another successful monetization for one of the largest investors in the GP-stakes market. Viewed in context, it highlights how dramatically Petershill’s strategy has shifted since abandoning its experiment as a public company.
Last September, Petershill announced plans to delist from the London Stock Exchange, arguing that its share price persistently failed to reflect the value of its underlying holdings despite growth in assets under management and earnings. Shares had traded at a significant discount to book value for much of their public life, prompting Goldman Sachs-backed funds to take the company private in a deal valuing the business at $4.5 billion.
At the time, management pointed to weak liquidity, a small free float and limited investor appetite for specialized alternative-asset businesses. But the delisting also removed pressure to convince public-market investors of the value of an inherently complex portfolio of private-market ownership stakes.
Since then, Petershill has increasingly demonstrated that value through transactions rather than quarterly disclosures.
The ArcLight sale is notable because it comes amid a broader resurgence in the GP-stakes market. Strategic buyers, sovereign wealth funds and dedicated GP-stakes investors are all competing for ownership interests in established private-market franchises, particularly firms with exposure to infrastructure, private credit and other high-growth sectors.
For Petershill, each realization serves a dual purpose: generating liquidity while reinforcing the argument that private-market buyers place a higher value on these assets than public shareholders ever did.
Bottom Line: The more stakes Petershill sells above carrying value, the harder it becomes to argue that the discounts that plagued its London listing reflected the underlying quality of the portfolio rather than the limitations of the public-market structure itself.
Fundraising
- Future Standard has closed PA Secondary Fund V, securing approximately $3 billion for the LP-led vehicle.
- GP stakes shop Hunter Point Capital closed its debut NAV loan fund, raising $4.3 billion for its recently launched GP financing strategy.
- Seine Capital closed its debut secondaries fund at $180 Million.
Continuation Vehicles
- Carlyle AlpInvest led Littlejohn & Co.’s continuation vehicle for building maintenance company Valcourt Group.
- Accel-KKR led Maxburg Capital Partners’ continuation fund to extend its hold on German cybersecurity firm Securepoint.
- Pacific Equity Partners led Navis Capital Partners continuation fund to extend its hold on Mainland Poultry, New Zealand’s largest egg producer.
- Behrman Capital filed for a new continuation fund, Behrman Capital CV II, according to a regulatory filing.
- Longpoint Capital raises CV to cash out MNS Engineers’ investors and fund the merger of MNS with BKF Engineers.
- Goldman Sachs led Equip Capital’s CV to extend its hold on Norwegian e-scooter company Ryde, valuing the company at about $420 million.
People
- Bodo Krug von Nidda, formerly managing director at PJT Park Hill, has joined Houlihan Lokey’s Capital Solutions Group.
- Prashant Gangwal, formerly CFO of Altos Ventures, joins healthcare secondaries firm Revelation Partners as CFO.
- Peter Rodrigues, formerly Director at Ontario Municipal Employees Retirement System Infrastructure, has joined Clipway as Managing Director.
- Peter Rosen, formerly in-house counsel at Coller Capital, joins Ropes & Gray as parnter.
- Vaanish Bisht, formerly Director at Wipro, has joined Blackstone as Vice President, Global Fund Finance.
- Demetrio Ortega, formerly Vice President, GlobalLink Client Acquisition at State Street, has joined HSBC as Vice President, Liquidity Sales.
- Lola Barquín Madariaga, formerly Asset Management Analyst at Arcano Partners, has joined Clipway as Investment Analyst.
- Leif Lindbäck, formerly Co-Head of TMT Europe at CVC Capital Partners, has joined Pantheon as Partner.
- Yasuyuki Kanda, formerly Managing Director at AlpInvest Partners, has joined Campbell Lutyens as Managing Director.
- Joshua Frankel, formerly Managing Director at PJT Partners, has joined Proskauer Rose as Partner, Secondary Transactions and Liquidity Solutions.
- Clay McCoy, formerly Managing Director at Campbell Lutyens, has joined Evercore Private Capital Advisory as Senior Managing Director.
That’s the market in motion. Stay sharp and see you June 24. Until then, send tips, quips and tidbits to secondaries@themiddlemarket.
