☕ 43% of PE exits are now... to themselves

Tuesday, March 31, 2026 | Private Markets Intelligence

Good morning, crowd.

Alberto here, let’s keep this week's newsletter short so we can give you as much value in little time.

Private equity firms are selling companies to themselves at record pace. It's called a continuation vehicle.

And it's now 43% of all secondary market activity, $115 billion last year alone.

Read time: 4 minutes

The Rundown: Private equity firms are increasingly using continuation vehicles to move portfolio companies from aging funds into new ones — allowing existing investors to cash out while GPs retain control and reset fees.

The numbers:

GP-led continuation vehicles hit $115 billion in 2025, representing 43% of total secondary market volume. That's up from 5% in 2020.

Single-asset deals make up 48% of GP-led activity. Vista Equity Partners just closed a record $5.6 billion continuation vehicle. New Mountain Capital is running a $3 billion multi-asset deal.

But here's the thing nobody's talking about: GPs sit on both sides of the transaction. They're the seller (from the old fund) and the buyer (into the new fund). Same company, same sponsor, new terms.

The backstory:

Traditional exits (M&A, IPOs) collapsed after 2021. Exit values fell 55% between 2021 and 2024. That left 31,000 companies stuck in PE portfolios with $3.7 trillion in unrealized value.

LPs needed distributions. GPs needed exits. But nobody wanted to sell at depressed valuations.

Solution: GPs created continuation vehicles. They move their best assets ("crown jewels") into new funds, give existing LPs a choice (cash out or roll over), bring in new capital, and keep running the company.

For LPs, it's marketed as liquidity + optionality. For GPs, it extends hold periods, resets carry, and avoids forced sales.

The red flags:

Here's where it gets messy.

Conflict of interest: GPs control the valuation. They're pricing the asset they're selling to themselves. Even with third-party fairness opinions, the GP picks the advisor.

10-day decision windows: LPs get 10 days to decide whether to cash out or roll over. That's not enough time for institutional investment committees to meet and re-underwrite a complex asset.

Fee resets: GPs reset their carried interest when moving assets into CVs. That means they get paid twice — once from the old fund, again from the new one.

Valuation opacity: Most LPs cash out (not roll over). Why? Because they don't trust the pricing. When 70-80% of LPs take liquidity instead of rolling, that's a signal.

Why it matters:

Continuation vehicles are now 14% of all private equity exits — bigger than IPOs in some quarters.

But they're not solving the liquidity crisis. They're extending it. Companies that should have been sold in 2022-2023 are being moved into new funds with 5-7 year hold periods.

That means: longer time to liquidity, more fee resets, and GPs controlling when (and if) you ever see a real exit.

The model works when assets are genuinely high-quality and deserve more time. It breaks when it's used to avoid marking down losers.

How to spot it:

If you're invested in PE funds (or considering secondaries), watch for:

Most LPs cash out because they'd rather take 90 cents today than bet on the GP's new 5-year plan at par value.

CVs are now the exit. 43% of secondaries volume, 14% of PE exits. What used to be an alternative is now the main path.

The conflict is structural. GPs price assets they're selling to themselves, reset fees, and extend timelines — all while LPs get 10 days to decide.

Most LPs don't roll. When 70-80% take cash instead of reinvesting, that tells you everything about pricing confidence.

This is why we focus on primary private market deals — not secondaries or PE funds where GPs control the exit.

When you invest in private companies directly (SpaceX, OpenAI, Anthropic), you own equity. No GP. No continuation vehicles. No fee resets.

Premium members get:

$40/month. No carried interest. No 10-year lockups.

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