Private Equity Continuation Funds: GP-Led Secondaries in 2025

Private equity continuation funds are rapidly establishing themselves as go-to, dare I say, “mainstream” strategies in the private equity secondary market.

These secondary transactions offer general partners GPs) a way to extend the hold on prized assets while giving limited partners (LPs) a liquidity option when traditional exits (like IPOs or sales) are challenging.

But with great upside potential comes great responsibility, and compliance responsibilities, and due diligence, as industry insiders have discovered over the past few years as the secondary market continues to boom. 

Continuation fund deals can be tricky for everyone involved. That’s why the team at Vestlane have put together a guide with the key insights GPs, LPs, and their compliance and investor relations teams need to navigate the process with more clarity and confidence.

What You’ll Learn in This Blog

• A clear explanation of what continuation funds are
• Key trends shaping the continuation fund landscape in 2025
• How these funds are structured — including single-asset vs. multi-asset vehicles
• Governance, compliance challenges, and potential risks
• Industry best practices, featuring ILPA guidance
• Real-world examples from today’s market
• Bonus: Practical tips to help you navigate continuation funds successfully

We’ll also discuss how adopting modern tools can streamline compliance with Know Your Customer (KYC) and Anti Money Laundering (AML) regulations, as well as expedite investor onboarding in continuation fund transactions. 

But more on that later.

What Are Private Equity Continuation Funds?

Private equity continuation funds, sometimes referred to as continuation vehicles (CVs), are special private equity fund vehicles created to purchase one or more existing portfolio companies from an older fund managed by the same GP. 

To break it down even further; a GP sets up a new fund to “continue” ownership of an asset (or assets) beyond the normal life cycle of the original fund, usually as a result of further upside potential. 

The new continuation fund buys the stake from the old fund, allowing original investors to exit for cash or roll their stake into the new vehicle for more time in the investment.

This makes continuation funds a form of GP-led secondaries deal wherein the GP orchestrates a secondary market transaction on the fund’s assets, as opposed to an LP-led secondary where an LP sells their fund interest to another buyer on the market.

Continuation funds began as a way for GPs to hold onto companies longer (especially during the post-2008 era) and have boomed since the mid-2010s.

Unlike a traditional secondary sale (where an LP sells its fund interest and the underlying companies remain in the fund), continuation fund deals involve GPs on both sides of the transaction, which introduces conflicts but also alignment opportunities, through clever deployment of different types of investment vehicles within the secondary market. 

Single-Asset vs. Multi-Asset Continuation Vehicles (SACVs vs. MACVs)

Continuation fund deals come in two varieties: single-asset continuation vehicles (SACVs) and multi-asset continuation vehicles (MACVs).

A single-asset continuation fund involves just one portfolio company being rolled into a new vehicle from an existing fund.

These are often used for a GP’s star performer or a company with significant remaining growth potential.

A multi-asset continuation fund bundles two or more companies (sometimes the remaining holdings of a nearly fully realized fund) into one new fund.

Both can be effective forms of value creation, provided there is effective investment management and alignment of interests.

Single-Asset CVs

In a nutshell, SACVs are continuation funds dedicated to one business. They allow a GP to focus capital and attention on a high-conviction asset.

For example, a GP might spin out its most successful tech company into a continuation fund to ride its growth for a few more years, rather than selling it during hostile market conditions. 

SACVs have surged in popularity, as recent research indicates about 55% of GP-led secondary deals now involve single-asset continuation vehicles. 

The appeal is that new investors can underwrite that one company deeply, and the GP can negotiate a tailored deal for that asset, once existing fund investors are also satisfied.

However, it would be remiss not to mention that SACVs concentrate risk in one asset and put a spotlight on valuation, since the entire deal hinges on one company’s price.

During times of heightened volatility, in both the public market and the private, co-investment in a SACV might test the mettle of even the most seasoned investors.

Multi-Asset CVs

MACVs include multiple companies and can offer diversification for investors.

They’re often used when a GP has a few remaining mid-tier assets as a fund nears its end, or wants to package a couple of businesses together. 

Multi-asset deals still make up a significant share of continuation fund activity (around 43% of GP-led transaction volume, per Evercore research from 2024). 

In recent years, several large-cap GPs used MACVs to generate liquidity and reset holding periods across a section of their portfolio.

GP-led transaction volumes reached record highs in 2024, marking an almost 50% increase from 2023, according to research by Houlihan Lokey.

These vehicles may be easier to market when fundraising with buyers who prefer a portfolio over single-company risk.

However, including multiple assets can increase potential conflicts of interest, thereby complicating negotiations (ensuring each is fairly valued, for example, can be a time-consuming endeavour) and might mix assets of varying quality.

The current and ongoing trend suggests that, regardless of GPs’ varying risk appetites, both SACVs and MACVs are here to stay.

But what can we expect in the coming months and years?

2025 Trends in GP-Led Secondaries and Continuation Funds

At present, most indicators suggest that the continuation fund market in 2025 is both robust and maturing. 

In fact, global secondary deal volume reached an estimated $162 billion in 2024, up 45% from the prior year, according to research by Adams Street Partners, eclipsing the pre-pandemic record set in 2021. 

Nearly half of that volume was driven by GP-led deals like continuation vehicles: according to Jefferies data, GP-led secondaries made up about 44% of total secondary deal volume in 2024, a trend expected to continue into 2025.

This underscores that continuation funds have evolved, and continue to evolve, into a more mainstream investment vehicle.

GP-led secondaries activity is being fueled by several factors in 2025:

• Exit Environment: Traditional exit routes for private equity have been challenging. With IPO windows sparse and M&A activity down, GPs are turning to continuation funds as an alternative liquidity solution.
  
  
• Investor Appetite: There is strong investor demand to participate in these deals. The private equity secondaries space has ample dry powder, and buyers are actively looking for quality assets via GP-led transactions.
  
  In January 2025, France’s Ardian announced the closure of a $30 billion secondaries fund, the largest ever in the sector.
  
  Secondary investors, including dedicated secondaries funds and institutional LPs, are increasingly comfortable with the risk/return profile of continuation funds.
  
  In a recent survey by Adams Street Partners, 28% of LPs identified secondaries (including GP-led deals) as offering the most attractive opportunities for 2025, up from 24% the year before.
  
  Continuation vehicles in particular have shown competitive performance with analysis by Morgan Stanley finding these deals can deliver risk-adjusted returns in line with vintage buyout funds but with lower downside risk, increasing their appeal to LPs.
  
  
• Normalized LP Sentiment: Despite some raised eyebrows around GP-led secondaries in their early days, LPs have grown more accepting of continuation funds as a legitimate option. “LPs continue to broadly show confidence in continuation funds,” notes Preqin’s 2025 outlook.
  
  In fact, two in five investors in one 2024 survey said they were considering selling assets into the secondary market, indicating that LPs are actively evaluating these liquidity options.
  
  That said, LPs are also becoming more discerning: most will take the cash-out option if offered a fair price, unless they have strong conviction in the underlying assets and trust the GP’s process.
  
  This puts healthy pressure on GPs to run continuation deals in an LP-friendly manner.
  
  
• Specialized Funds and Strategies: The boom has led to specialization. Large secondary players (like Ardian, Blackstone’s Strategic Partners, Lexington, etc.) are focusing on GP-led deals, and even some newer entrants target this niche exclusively.
  
  At the same time, mid-sized GPs are increasingly using continuation funds for mid-market deals, not just mega-deals.
  
  This wealth of activity suggests continuation funds are not a one-off fad but are instead becoming a foundational part of the private equity landscape now. Against this backdrop, investment advisers could be more in demand than ever before.

In summary, so far the trend in 2025 is clear: GP-led continuation funds are booming and evolving.

Big-ticket funds like Ardian’s record breaker highlight the influx of capital, while deals are happening across regions and sizes.

LPs largely welcome these transactions as a tool for liquidity and potentially strong returns, provided they are done fairly.

The stage is set for continuation funds to remain a significant share of private equity exits in the coming years.

Governance and Compliance Risks in Continuation Fund Deals

While continuation funds unlock new possibilities, they also carry unique governance and compliance risks.

By their very nature, there is a certain degree of friction inherent to a GP-led continuation fund is an inherently conflicted transaction as the GP (and its affiliates) sit on both the sell side and buy side of the deal.

This dual role can create misaligned incentives and requires careful handling to ensure fairness to investors. Key risks and challenges include:

1. Conflict of Interest: The GP is effectively negotiating with itself on behalf of two sets of investors (the old fund’s LPs and the new buyers/continuation vehicle).
   
   There is an inherent tension: the selling LPs want the highest price for the assets, while the new investors (and GP rolling forward) prefer a lower entry price.
   
   If not managed properly, GPs could be tempted to set terms that favor the new fund (where they may earn a fresh management fee/carry) at the expense of existing investors exiting.
   
   ILPA notes that the “most concerning conflict” in these deals is indeed the GP’s presence on each side, especially around asset pricing. To guard against this, robust conflict checks and independent valuations are critical.
   
   
2. Transparency and Timing: Continuation transactions often move quickly, and the information asymmetry can be significant. GPs and secondary buyers might negotiate deal terms before LPs are fully in the loop.
   
   Existing LPs are then given a short window to make a complex decision, sell or roll, which “demands attention to details that are difficult to evaluate within the timeframes provided” according to the ILPA principles and best practices.
   
   A lack of transparency can breed mistrust and even potential legal disputes after the fact.
   
   
3. “Misuse” Concerns: Some industry leaders have cautioned that continuation funds, in a few cases, have been pushed too far.
   
   There have been cases when continuation funds have been “misused and overused”, warns Teia Merring, senior investment director at USS and chair of ILPA.
   
   Such misuse might refer to GPs rolling mediocre assets just to extend fund life or earn new fees, rather than genuinely acting in investors’ best interests.
   
   Overuse could also mean doing serial continuation funds without clear justification, potentially straining LP goodwill.
   
   These warnings underscore that continuation funds are not some kind of Golden Ticket – LPs expect a strong rationale and alignment, not just a GP attempting to rescue unsellable assets.
   
   
4. Regulatory Scrutiny: With the rise of continuation funds, regulators are paying attention.
   
   In the U.S., the SEC has flagged GP-led secondary transactions (including continuation funds) as an examination priority, concerned about conflicts and transparency.
   
   New SEC rules now require registered GPs to report these deals on Form PF and are expected to mandate fairness opinions for adviser-led secondaries.
   
   GPs failing to run a fair process could face not only LP backlash but also regulatory action.
   
   Likewise, in Europe, regulators and LP advisory committees are scrutinizing compliance aspects like valuation fairness, fee disclosure, and KYC/AML checks on any new investors entering the fund.
   
   
5. Compliance and Operational Complexity: Beyond potential conflicts, these deals also involve significant operational work.
   
   Transferring assets to a new fund means updating subscription documents, obtaining consents (possibly from lenders or co-investors), and ensuring no breaches of the original fund’s terms.
   
   KYC/AML compliance must be redone for any new investors coming into the continuation vehicle, and any sanctions or AML risks assessed for transfers.
   
   GPs also need to manage communications carefully so as not to advantage any one LP over another (which could raise fairness issues).
   
   The complexity can introduce execution risk – any errors in process could delay closing or expose the GP to compliance violations.

Given these risks, truly robust governance is paramount. LPs are increasingly insisting on clear procedures, independent oversight, and thorough disclosure for continuation fund processes.

In response, industry bodies like ILPA have issued guidance to set parameters for a “well-run” transaction that addresses these very issues.

Ultimately, the success of a continuation fund (and the reputation of the GP) hinges not just on the economics of the deal, but on how ethically and transparently the process is conducted.

GPs that get this right can strengthen their LP relationships; those that don’t can permanently damage trust.

With that in mind, let’s explore the latest best practices and guidelines GPs should follow to navigate these deals responsibly.

ILPA Guidance and Best Practices for Continuation Funds

To promote fair outcomes in GP-led secondaries, the Institutional Limited Partners Association (ILPA) released comprehensive continuation fund guidance in 2023.

The ILPA observed that while continuation deals were increasing, there was a lack of industry consensus regarding what constitutes a well-run continuation fund process. 

Drawing on ILPA’s principles and broader industry best practices, here are some foundational best practices for continuation funds:

• Engage LPAC Early and Mitigate Conflicts: Involve the Limited Partner Advisory Committee (LPAC) from the start. All conflicts of interest should be reviewed and approved by the LPAC.
  
  GPs should consult the LPAC on the rationale for the continuation fund, the choice of any advisors (e.g. secondary sale advisor or banker) and their compensation, and deal terms well before signing.
  
  ILPA suggests the LPAC or another independent body formally evaluate conflicts even if the fund’s LPA doesn’t strictly require it.
  
  The LPAC should have the right to seek independent advice (paid by the fund) on complex deals.
  
  By getting LPAC buy-in and guidance, GPs can ensure transparency and fairness throughout the process.
  
• Full Transparency and Information Parity: All LPs (not just the LPAC) should eventually receive the same information about the deal as the GP and new investors.
  
  GPs should set up data rooms and share detailed disclosures so that selling LPs can evaluate the offer just like a buyer would.
  
  This includes providing independent valuations or fairness opinions on the assets, information on the GP’s plans for the asset, fee/carry arrangements in the new fund, and any other material facts.
  
  The ILPA notes that obtaining a third-party fairness opinion on the proposed price can be “beneficial” for LPs  and regulators across the globe may soon require one in every continuation deal.
  
  These steps help level the playing field and assure LPs that the price is in a reasonable range.
  
  The goal is to eliminate information asymmetry: no secret deals or last-minute surprises.
  
  
• Adequate Time for LP Decisions: LPs must be given sufficient time to make their decision to roll or sell.
  
  The ILPA recommends at least 30 calendar days (or 20 business days) for LPs to evaluate the transaction.
  
  Remember, an LP might need internal investment committee approval to roll into a new fund, effectively treating it like a new commitment. Rushing this decision is inappropriate given the complexity.
  
  ILPA also suggests that if an LP fails to respond in time, the default should be to cash out  (as if the fund simply sold the asset) as this prevents LPs from accidentally remaining in a deal they didn’t actively choose.
  
  GPs should communicate the timeline clearly and consider offering extensions if many LPs need more time. The bottom line: avoid pressuring LPs with an unreasonable deadline.
  
  
• Offer a Fair “Roll” Option: In addition to a cash-out, provide LPs the option to roll into the continuation fund on terms that are as close as possible to “status quo.”
  
  ILPA advocates for a “status quo” rollover option , meaning rolling LPs continue with the same economics as before (same carry structure, etc.), or at least terms that ensure they’re no worse off than if no deal happened.
  
  In practice, new continuation funds often have new terms, but GPs can offer incentives (like reduced or zero carry for rolling LPs) to make it fair.
  
  The principle is to treat rolling LPs equitably versus new investors. This builds trust that the GP isn’t doing the deal just to reset economics at LPs’ expense.
  
  
• Align GP Incentives (Skin in the Game): GPs should demonstrate alignment by investing in the continuation fund and rolling over any earned carry from the sale.
  
  The ILPA’s guidance calls for 100% of any crystallized carried interest to be rolled into the new fund.
  
  In other words, if the GP is due a carry payout because the asset is being sold to the new vehicle, that payout should be re-invested alongside LPs, so the GP’s money remains at risk in the deal’s future performance.
  
  Alternatively, if a GP decides not to roll all of it, they should provide a detailed explanation why not.
  
  It also mitigates the conflict of interest since the GP benefits economically only if the continuation fund succeeds.
  
  
• Maximize Value for Selling LPs: The process by which the asset price is determined should be designed to get the best attainable value for the selling (existing) LPs.
  
  ILPA emphasizes that GPs have a duty to seek maximum value for exiting investors.
  
  This means running a robust process to solicit interest from multiple secondary buyers, similar to a mini-auction or at least getting multiple bids, rather than a one-and-done prearranged sale.
  
  The GP’s secondary advisor should ideally canvas the market to ensure the price is competitive. The LPAC can insist on seeing evidence that the GP tested the market.
  
  Some processes include a go-shop period where the GP, after negotiating with a lead buyer, allows others to submit topping bids.
  
  By maximizing the sale price, the GP ensures that selling LPs get as close to full market value as possible (and rolling LPs enter at a fair mark).
  
  This principle – that LPs should be no worse off than a normal third-party sale – underpins the duty the GP owes to its investors.

By adhering to these best practices, GPs can execute continuation fund transactions that stand up to LP scrutiny and industry standards.

In summary, a well-run continuation deal should be transparent, well-governed, and aligned: the LPAC is involved, disclosures are ample, timelines are reasonable, and the GP shows alignment by sharing in the outcome.

When done right, continuation funds can truly be win-win, offering liquidity with integrity.

ILPA’s guidance has effectively set a benchmark; GPs that follow it are more likely to maintain LP trust (and even have LPs roll with them into the new fund), whereas those who cut corners risk reputational damage.

Ardian’s $30B Secondary Fund and Trustar’s McDonald’s Deal

Let’s look at two recent examples from opposite ends of the spectrum – one showcasing the sheer scale of secondary capital, and another showing the innovative use of a single-asset continuation fund.

Ardian’s Record $30B Secondaries Fund (2025)

Paris-based Ardian set a new record in January 2025, raising a $30 billion secondaries fund—the largest ever in private equity secondaries.

Surpassing the previous record by $7 billion, the fund attracted commitments from 465 investors, including substantial private wealth channels.

Ardian will allocate significant capital toward GP-led continuation vehicles, reflecting increasing investor appetite and a surge in deal volume.

This large-scale capital pool enables multi-billion-dollar continuation deals, providing substantial liquidity for top-tier assets.

Trustar’s $1 Billion McDonald’s China Continuation Fund (2024)

On the other end, there was a single-asset continuation fund executed in late 2024 by Trustar Capital in China.

Trustar (formerly CITIC Capital) raised $1 billion for a continuation vehicle to hold its controlling stake in McDonald’s China.

This deal allowed Trustar to extend its ownership of McDonald’s franchise operations in mainland China and Hong Kong, a marquee asset, while bringing in new investors.

According to Reuters, the Qatar Investment Authority (QIA) committed the largest amount as the anchor investor, and other participants included China’s sovereign fund CIC and several yuan-denominated investors.

Essentially, Trustar created a new fund to buy the McDonald’s China stake from its older fund, giving liquidity to any exiting LPs.

On one side, huge pools of capital are being raised to invest in secondaries, including continuation funds.

On the other, GPs are innovatively structuring deals to hold onto companies and partnering with secondary buyers to do so. 

The takeaway here is that continuation fund transactions are no longer exceptional; they’re becoming standard practice for leading GPs.

Whether you manage a $500 million fund or a $5 billion fund, the option to create a continuation vehicle is on the table if it can maximize value.

The key is doing it in a way that attracts high-quality secondary capital (like Ardian’s or QIA’s) and keeps your existing LPs happy.

That’s where adhering to best practices and compliance comes in, and where platforms like Vestlane can play a supporting role.

Compliance and Onboarding with Vestlane

Executing a continuation fund deal involves much more than just moving money, it’s a detailed operational process that demands careful compliance management.

From a back-office perspective, GPs must establish a new fund entity, transfer or admit potentially dozens of investors, and manage all the accompanying KYC/AML and documentation tasks.

Ensuring compliance and efficiency in this process is critical to closing the deal on time and maintaining trust.

This is where using technology, such as Vestlane, can make a significant difference.

KYC/AML Integration: Every new investor coming into the continuation vehicle (and every rolling LP, if increasing their stake) needs to undergo Know Your Customer (KYC) and Anti–Money Laundering (AML) checks.

In a GP-led secondary, you might have a mix of investor types – secondary funds, institutional LPs from various countries, maybe high-net-worth channels; all of whom must be vetted.

Performing these checks manually for each investor can be time-consuming and prone to error, especially under deal time pressure.

Vestlane offers an integrated KYC & AML solution that automates and streamlines these compliance checks. 

Accelerated Investor Onboarding: Continuation fund closings involve complex documentation (subscription agreements, tax forms, partnership agreements) for multiple investors.

Vestlane automates and streamlines onboarding, allowing investors to digitally complete and sign documents rapidly, often within minutes. 

Real-time Transparency: Vestlane provides stakeholders, including GPs, LPs, lawyers, and placement agents, a shared dashboard to track investor onboarding and subscription statuses. 

This real-time transparency minimizes communication delays and identifies potential bottlenecks promptly.

Compliance Assurance: Vestlane offers audit-ready documentation for all KYC/AML processes.

The platform ensures proper record-keeping, satisfying regulatory scrutiny, reassuring LPs, and allowing GPs to focus on deals instead of paperwork.

Adopting platforms like Vestlane significantly reduces risk for private funds and reduce overheads.

It also simplifies KYC/AML, enhances investor experience, ensures compliance transparency, and underscores the GP’s commitment to operational best practices.

For any GP considering or preparing a continuation fund, investing in such technology is increasingly becoming a best practice in itself.

It shows your LPs that you take the process seriously enough to use best-in-class tools to protect their interests.

Our Vestlane platform is built to meet the specific demands of continuation fund deals: helping GPs stay compliant while giving investors a smoother, more transparent experience.

Interested in exploring how we can support your next continuation fund or secondary transaction?

Book a free consultation with our team or fill out the form below to see the platform in action and discover how we can help you close deals faster while staying fully compliant.