Episode summary
Why Private Equity Funds Won’t Sell Their Best Assets
How I Invest With David Weisburd
· · 23 min · Hosts: David Weisburd · Guests: Benjamin Carper
Summary
Continuation vehicles are growing fast because they solve a basic mismatch in private equity: fund lives are often arbitrary, while the best assets may still have room to compound. Benjamin Carper says the market will see north of $110 billion of continuation vehicle volume in 2025, up from about $75 billion in 2024, and he argues the category is now a durable part of private markets rather than a niche workaround.
He explains that CVs let sponsors keep winning assets instead of selling them just because a 10-year fund clock is running out. That can reduce friction from a sale, preserve a working strategy, and give sponsors more time and capital to support businesses with recurring revenue, predictable cash flow, and organic or inorganic growth paths. Pricing is typically done through an auction run by an adviser, though sponsor-led recapitalizations also happen.
For LPs, the appeal is liquidity and the chance to stay invested in strong companies, but the tradeoff is more decision-making and skepticism about marks and pricing. Carper says most LPs either take full liquidity or roll fully, and that CVs increasingly function as a kind of direct-investing exercise and even a way for LPs and GPs to build longer-term relationships around a specific asset.
Key takeaways
- Benjamin Carper says continuation vehicle volume will exceed $110 billion in 2025, after about $75 billion in 2024.
- Carper argues CVs exist because private equity fund lives are arbitrary and can force sales before the best assets are done compounding.
- He says LPs like CVs for cash liquidity and exposure to high-quality companies, but dislike the extra portfolio decision-making and mark skepticism.
- Carper says the most attractive CV assets are typically mid-market companies with recurring revenue, predictable cash flow, and clear growth vectors.
- He says sponsor alignment matters most when GPs roll most of their own equity into the continuation vehicle.
Notable quotes
“continuation vehicles represent one of the fastest growing and probably most innovative parts of the private markets”
“What continuation vehicles do at their core is help sponsors manage portfolio companies that are not necessarily well timed to the 10-year closedend private equity fund life cycle”
“a CV allows you to keep your winners and to continue compounding those winning assets”
“continuation vehicles are a pretty steady source of liquidity and not just liquidity, but cash liquidity for LPS”
How the episode opens
So Ben, you help lead the 90 person secondaries team at Jeffre, which is largely focused on the continuation vehicle space today. Why is there such a focus on continuation vehicles today?
Well, continuation vehicles represent one of the fastest growing and probably most innovative parts of the private markets. Um there will be announced in the next week or so uh north of $110 billion of continuation vehicle volume in 2025. Um that's a second record year in a row for for the market and uh up quite significantly uh from where we were in 2024 at about $75 billion of continuation vehicle volume.
Is there an 8020 aspect to this $10 billion where there's a few firms driving the majority of that behavior?
It's quite broadly distributed amongst a variety of not just uh mid-market, large cap, smaller smaller cap buyout focus firms, but venture capital firms.
Are these $20 million vehicles, $200 million vehicles? the the general market is around a half billion dollars of of size for an individual continuation vehicle with the the range between you know hund00 million to $5 billion. The companies that are being uh involved contributed to continuation vehicles are companies that could be $50 million of ibeta or $500 million of ibeta.
There's there's definitely a strong cohort of mid-market companies that are uh being targeted by continuation vehicles, but we're also seeing continuation vehicles for you know preo uh VC darlings as well. Um the the stripes and data bricks and you know anthropics of the world
And I want to get into in a little bit deconstructing what a typical continuation vehicle deal looks like. But first, why this trend for continuation vehicles? Why has there been such an increase in volume over the last couple years?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- continuation vehicles
- private equity liquidity
- lp gp alignment
- private market liquidity solutions
- pricing and rollover options
Companies and tickers mentioned
- JEF
- Jefferies
Watch the episode
Watch “Why Private Equity Funds Won’t Sell Their Best Assets” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from How I Invest With David Weisburd
-
Hunter Walk: Why Venture is Getting Harder, Picking Great Founders, and Investing Against Consensus -
True Anomaly’s Even Rogers on Space Warfare, China’s Military Advantage, and the Defense Tech Boom -
Finding the Next Anthropic, Quantifying Venture Capital, and the Science of Picking Winners -
Why 95% of AI Projects Fail, Anthropic still at $2T?, and Why AI Is Still in the First Inning -
Peter Thiel's 27-Year Partner on the AI Bubble, the Venture Capital Crisis, and the PayPal Mafia -
Why Venture Is Eating Public Markets, Picking Great VCs, and the AI Boom w/Brijesh Jeevarathnam
How I Invest With David Weisburd, this episode and its artwork belong to David Weisburd. Octagon is not affiliated with the show; this page is an independent summary.
