The Rise of Continuation Funds in Private Equity

August 21, 2025 - 09:32

In recent years, companies have been opting to remain private for extended periods instead of pursuing traditional routes such as initial public offerings (IPOs) or mergers and acquisitions (M&A). This shift has led to a notable increase in the use of continuation funds, also known as continuation vehicles (CVs). These funds allow private equity managers to transfer older assets from their aging funds into newly established pools of capital, effectively revitalizing their investment strategies.

Continuation funds have become a significant trend in the private equity landscape, reflecting a broader transformation in how firms manage their portfolios. As market conditions evolve and investors seek new opportunities, these vehicles provide a flexible solution for fund managers to maintain control over their investments while also attracting new capital. This trend underscores the changing dynamics of the private equity market, as firms adapt to a landscape where staying private is increasingly favored over going public.