In today’s market, investors and investment managers are asking for more time — whether to stay invested or exit — and, with fundraising extensions becoming common and fewer new assets available, many are seeking alternative ways to meet their investment goals.
The market has been characterized by a more difficult fundraising environment and limited distributions. A primary motivation for the increased use of continuation vehicles (CVs) is to provide liquidity and to limit selling high-quality assets into a difficult market. In addition, CVs are being fueled by the appeal of reduced risk, more predictable returns and lower fees.
“CVs can be an elegant way to offer LPs liquidity without forcing general partners [GPs] to forego upside on trophy assets. This is behind the CV market’s persistent secular growth trend. The recent dearth of liquidity in private markets has added fuel to this secular trend,” says Ryan Smith, a managing director on the secondary inv
