News Digest: Continuation fund deals soar in private equity
June 20, 2022
The volume of so-called “continuation fund” or “GP-led secondary” deals, wherein private equity firms acquire portfolio companies that they already own, soared from $27bn in 2019 to $65bn last year, according to data compiled by Cebile Capital.
Such “adviser-led secondary” transactions have been on the rise in the U.S., U.K. and other markets since the onset of the Covid-19 pandemic, when a freeze in financial markets prompted buyout groups to search for alternative options to exit their holdings.
These deals are typically financed by so-called “secondary funds”, which in turn raise capital from institutional investors such as pensions and sovereign wealth funds that private equity groups count among their limited partners.