Secondaries

Continuation vehicles made up around 9% of total PE distributions in 2023 amid sluggish M&A and IPO markets, according to data from Baird.

Traditional LPs contemplating GP-led focused funds have been intent on identifying examples of fully crystallized continuation funds in recent years.

Until some of the more inefficient aspects of the continuation fund process are smoothed out, these deals are not likely to become routine exit options alongside IPOs and strategic sales.

Lead buyers in some recent transactions have been able to negotiate a less than 1% management fee, according to a paper from Proskauer.

A disconnect exists in the industry between GPs who view continuation funds as a desirable way to hold certain assets beyond the limits of a traditional private equity fund, and LPs who generally would prefer a regular exit.

A footnote in the US Securities and Exchange Commission's new rules suggests continuation funds structured as cross fund trades won't be subject to third-party fairness opinion and valuation letters.

The opening up of the market for pension fund-issued collateralized fund obligations could represent a major avenue of liquidity relief for other investors.

Industry veteran Dee Dee Sklar will help the secondaries GP with its credit arm.

The issuance of a collateralized fund obligation would be a breakthrough for struggling GPs and institutional investors alike.

The trade group has issued guidance to address concerns over conflicts and the speed of GP-led deals.