Private equity firms leaned more heavily on continuation funds in 2025, selling portfolio companies from older vehicles into newer funds managed by the same sponsor at a record pace. Reported figures suggest roughly one-fifth of PE exits in 2025 used this structure, up from about 12%–13% in 2024. These deals typically bring in new investors (and sometimes allow existing LPs to roll their stakes) to purchase an asset from an older fund, creating liquidity without relying on a third-party buyer or an IPO.
Reported year-end estimates put 2025 continuation-vehicle transaction volume at about $107 billion, up from roughly $70 billion in 2024, reflecting a tougher exit environment and ongoing valuation gaps in public markets and strategic sales. The approach remains controversial because the sponsor sits on both sides of the transaction, raising conflict-of-interest concerns around valuation and process. Supporters argue the structure gives LPs a choice to cash out or roll, and that incoming capital helps anchor pricing, while critics counter that many fund investors are set up to underwrite managers rather than individual assets—leaving them at a disadvantage when asked to assess single-company transfers.
