Secondaries: Capitalising on the wave

Continuation vehicles are here to stay

GP-led transactions are on track to exceed $100bn in 2025¹, cementing their role as a structural feature of private markets. One in six buyout exits now occurs via a GP-led² – a dramatic rise from single-digit percentages just a few years ago and 75% of GPs say they will participate in secondaries within the next 2 years³. CVs are no longer considered a stopgap; they are a strategic solution for GPs seeking to retain high-performing assets and maintain AUM stability.

Why the increase in popularity? For GPs, selling prized assets to competitors makes little sense when upside remains. CVs allow managers to take another lap around with their best companies while providing liquidity to existing LPs. For investors, CVs offer flexibility when traditional exits are not an option. Instead of waiting for uncertain IPO or M&A markets, LPs can choose to roll into a new vehicle and maintain exposure to high-performing assets, sell for immediate liquidity, or even increase their stake. This optionality is critical for institutions facing a dearth in distributions and portfolio rebalancing pressures.

Backlog in deal activity for next year is twice what it was in 2024⁴, driven by GP-led transactions that require longer lead times. While traditional exit routes may reopen in 2026, CVs are expected to remain prevalent, driven by GPs’ strategic objectives such as preserving AUM and maximising upside on trophy assets. Over the next five years, the market is projected to expand, supported by new capital from wealth platforms, sovereign wealth funds, and insurance investors.

What’s on the horizon? Expect CV-squared transactions – where a continuation vehicle itself becomes the subject of a new CV – to gain traction. Other innovations include hybrid CVs combining preferred equity and debt, CVs with structured liquidity options and NAV-based financing integrated into GP-led deals. These developments point to a future where GP-leds are an even more sophisticated portfolio management tool.