The growth of secondaries and continuation vehicles
Illiquidity is a fundamental feature of private markets. Unlike public equities or bonds, buyout, venture capital, private credit, and other private assets are typically held in funds designed for long investment horizons of ten or more years. Investors (known as limited partners “LPs”) commit capital to fund managers (known as general partners “GPs”) with the understanding that distributions will occur over time as value is created, and then realized, in underlying assets, rather than via continuous trading in an open market.
This illiquidity has been considered both a constraint and a feature of private markets. As a constraint, it limits decision-making flexibility for both LPs and GPs. As a feature, it permits GPs to implement long-duration strategies that can better promote value-creation efforts at their portfolio companies.
As private markets have grown in size and complexity, however, the constraints of illiquidity have become more salient. The secondaries market emerged as response to alleviate these issues, initially as a means for investors to buy and sell existing interests in private funds. By enabling LPs to transfer positions prior to a fund fully winding down, secondaries introduced an important source of liquidity into an otherwise illiquid ecosystem. What began as a relatively niche market has evolved into a sophisticated segment that is central for portfolio management for LPs and GPs alike. As presented in Figure 1, total secondaries market transaction volume hit $226 billion in 2025, representing a 19.8% annual growth rate since 2013.[1] Additionally, the first half of 2026 witnessed a record first half of activity, totaling $121 billion compared to 1H 2025’s $102 billion in volume.
Growing in popularity within the secondaries landscape is the continuation vehicle (“CV”). In CV transactions, one or multiple assets are sold from an existing fund into a new vehicle. This allows LPs to choose between selling their current positions or maintaining their exposure by rolling prior commitments into the new vehicle. This approach can align several objectives at once by offering liquidity to LPs who want to exit, preserving upside for LPs who wish to remain invested, and giving GPs additional time and capital to deliver on value-creation plans for assets they still view as “crown jewels.”
As with any innovation, CVs are no panacea. They present LPs and GPs alike with potential conflicts of interest and information asymmetries. For instance, GPs are both the seller (as the legacy fund manager) and the buyer (as the CV sponsor). They are, more or less, “negotiating” with themselves on price, fees, and other deal terms. For LPs, they are forced to make a decision between selling their position in the legacy fund or participating in the CV—often in abbreviated time frames and without the same information the GP possesses.
Although CVs are still a relatively new development and present the above challenges, they have become increasingly prominent and economically significant. Industry analyses estimate that only five total CV transactions occurred in 2018, growing to 75 by 2024, and 85 as of year-end 2025.[2] This exponential growth is also captured by the more than 35% annual growth rate in transaction volume registered from 2022 to 2025, which peaked at $95 billion 2025 (Figure 2).[3]
Early research review
Importantly for researchers, the maturity of the CV market has been accompanied by an expansion in the detailed data needed to conduct thorough analysis of these vehicles. As a result, it is now possible to study CVs in greater granularity, examining not only their mechanics, but also their risk and return relative to other private assets.
Two recent empirical studies emerged in response to the increased availability of CV data: Gottschalg (2024) and Luepertz, Roosenboom, and Verbeek (2025).[4] Gottschalg (2024) compiled demographic and performance data on 231 CVs established between 2018 and 2023, providing the first glimpse into the drivers of performance for these vehicles. First, the author shows that CV demographic information like location (i.e., E.U. or U.S.), type (i.e., single- or multi-asset), or size have no bearing on performance outcomes. Second, the analysis finds that CV performance is higher and less risky relative to more traditional private market vehicles like buyout funds. This second conclusion supports the argument that many of the assets purchased by the CV from the legacy fund represent those the GPs view as their “crown jewel” assets.
Luepertz, Roosenboom, and Verbeek (2025) supplement this initial work, assembling their own CV-specific dataset comprising 199 CV transactions involving 352 underlying assets that were completed from 2014 to 2024. The authors first conclude that CVs are typically established by larger, more reputable GPs, and involve the prior fund’s best performing assets. The authors also note that, while the GPs reinvest a significant portion of the carried interest earned in the original fund into the CV, they do not always roll over 100% of their realized carry. This behavior likely reflects the GPs’ dual-desire to collect a portion of the profits generated from the sale of the asset from the legacy fund, while also maintaining exposure to the high-potential asset transferred to the CV.
Research deep dive: Selling to Yourself
While the findings from these early empirical reviews are informative, many questions concerning CVs remain. The recent work of Abuzov, Gornall, Shive, Strebulaev, and Weisbach (2025)[5] adds to the nascent but growing library of research on CVs by building out the largest known CV dataset to-date. The authors utilize a combination of private data providers, public regulatory filings, industry publications, and manual searches to identify 427 CVs formed from 2005 to 2025, all matched to the original fund from which the assets were transferred. The detailed data allow the authors to examine CVs across several dimensions, providing deeper insight into what type of private funds establish CVs, the underlying assets that are transferred, LP dynamics and decision-making trends, and their preliminary performance.
What type of funds and fund managers launch CVs?
The authors note that CVs have not been adopted uniformly by managers, and the pattern of who actually launches them support prior research. First, higher-reputation GPs managing larger legacy funds appear more likely to raise a CV. This makes intuitive sense when one considers the information asymmetry challenges discussed earlier, as higher reputation GPs have earned more trust and credibility with their LPs.
Second, the analysis indicates buyout, and even growth, GPs have a higher probability of establishing CVs compared to venture GPs. The authors suggest this likely reflects differences in the underlying fundamentals of the strategies. Buyout managers often hold majority control of their portfolio companies, which can make it easier to manage timing, execution, and value creation through a CV. Venture managers, on the other hand, are more often minority holders alongside others, so establishing a CV would require greater buy-in across more stakeholders.
Third, the authors suggest legacy fund performance plays a major role in whether a CV is consummated. Funds with higher unrealized value, unsurprisingly, are more likely to use the vehicle compared to similar funds that have exited a higher proportion of investments. Additionally, funds posting higher IRRs are more likely to successfully establish a CV. The authors note that this finding makes intuitive sense: “GPs have incentives to launch [CVs] when they…can crystallize and de-risk their share of profits.”
What type of assets are transferred?
Interestingly, the authors find that asset size is the only characteristic that meaningfully affects the likelihood of its transfer to a CV. They analyze other factors such as revenue, profitability, valuation, and the type of deal, but do not find that these measures have any significant impact on the likelihood of transfer. Similar to the findings related to legacy fund performance, the authors surmise that transferring a larger asset or assets into a CV “can de-risk a larger part of their carry by transforming the carried interest into GP ownership [in the CV].”
LP dynamics and decision-making trends
Abuzov et al. then turn their focus from GPs to LPs. They find evidence suggesting an LP’s decision to roll a position into a CV is highly sensitive to both time-related and transaction-structure considerations. First, LPs appear increasingly less likely to roll their commitments into a CV that is formed later in the legacy fund’s life. This suggests an LP’s concern that under-performing assets will be transferred into the CV the longer a GP holds an investment. Second, LPs are more likely to roll into a multi-asset vehicle than a single-asset vehicle. As they note, this hesitancy is related to the lack of resources needed to confidently invest in a single asset: “LPs often claim that the reason why they do not roll into [CV]s is that they are not equipped to diligence acquisitions of individual companies, making rolling into [CV]s with only one asset particularly problematic.”
The authors also examine whether there are any trends related to LP type and propensity to either roll original commitments or to make new investments in a CV. As displayed in Figure 3, public pensions account for the largest portion of original, legacy LPs at 32%, and represent the largest portion of LPs that roll commitments into CVs.[6] Financial intermediaries, however, represent 66% of LPs making new investments in the CV. The authors argue this investor mix is not incidental: “[CV]s are smaller vehicles that attract less capital from traditional institutional investors…and more from specialized private equity intermediaries…GP-led [CV]s are supported primarily by a distinct, professionalized LP segment, rather than the same investors that backed the original legacy fund.”
An early review of CV performance
Questions concerning performance are top of mind for all investment professionals, and Abuzov et al. add to the prior empirical performance work on CVs. They find that while CVs outperform traditional funds on a net IRR-basis (23.9% vs 19.3%), the performance difference is not statistically significant (Figure 4). On the other hand, traditional funds outperform CVs on a net multiple-basis (2.00x vs 1.59x), and the results are statistically significant.
To better understand CV performance relative to traditional funds, the authors perform a regression analysis controlling for factors like fund type and fund vintage year. The results showed no statistically significant difference in performance, leading the authors to conclude that the preliminary analysis does not identify any concrete performance differences between CVs and traditional funds. They do caution, however, that the results should be interpreted with care given the immaturity of the CV data.
Tying it all together
Ultimately, private markets have historically displayed a penchant for innovative approaches to solve investor constraints. The rise of secondaries over the past decades, and the growth of CVs more recently, exemplify the industry’s inclination toward innovation. Notwithstanding concerns around information asymmetry and conflicts of interest inherent in private market investing, CVs offer an efficient way for LPs to address liquidity concerns and GPs to finance the crown jewels they are not ready to part with.
While preliminary, the burgeoning research on CVs offers market participants, both LPs and GPs, valuable insights:
- For LPs, early indications suggest the assets transferred to CVs are, on average, high-quality and represent potential opportunities for further value creation and capture.
- For GPs, understanding their LP base and what factors may inhibit or promote these LPs’ participation in a CV can help streamline the structuring process.
[1] “H1 2026 Secondary Market Highlights.” Evercore Private Capital Advisory. July 2026.
[2] Rustam Abuzov, Will Gornall, Sophie Shive, Ilya A. Strebulaev, Michael S. Weisbach. “Selling to Yourself: Continuation Funds In Private Equity.” NBER Working Paper 34471. November 2025; Silas Sloan. “Secondaries Investor CV Deal Log Full-Year 2024.” Secondaries Investor. (February 2025); Silas Sloan. “Secondaries Investor CV Deal Log Full-Year 2025.” Secondaries Investor. (February 2026).
[3] “1H 2026 Secondary Market Highlights.” Evercore. “2025 Secondary Market Highlights.” Evercore; “2024 Secondary Market Highlights.” Evercore Private Capital Advisory. January 2025. “2023 Secondary Market Highlights.” Evercore Private Capital Advisory. January 2024. “2022 Secondary Market Highlights.” Evercore Private Capital Advisory. January 2023.
[4] Luepertz, Leon, Peter Roosenboom, and Marno Verbeek. “From Exit to Extension: The Rise of Continuation Vehicles in Private Equity.” SSRN. August 27, 2025; Oliver Gottschalg. “Continuation Funds: Performance and Determinants.” HEC School of Management White Paper. July 2025.
[5] Abuzov et al. “Selling to Yourself: Continuation Funds In Private Equity.” (2025).
[6] The authors note that the higher prevalence could be a result of public pension’s reporting and disclosure requirements that other, private, LPs are not subject to.
