Traditional LPs contemplating GP-led focused funds have been intent on identifying examples of fully crystallized continuation funds in recent years.
Until some of the more inefficient aspects of the continuation fund process are smoothed out, these deals are not likely to become routine exit options alongside IPOs and strategic sales.
Lead buyers in some recent transactions have been able to negotiate a less than 1% management fee, according to a paper from Proskauer.
A disconnect exists in the industry between GPs who view continuation funds as a desirable way to hold certain assets beyond the limits of a traditional private equity fund, and LPs who generally would prefer a regular exit.
Survey suggests many investors made the mistake of pulling back in the downturns of 2001 and 2008 and want to avoid that now.
North American managers are being drawn across the Atlantic, attracted by new structures and stable regulatory frameworks, according to Crestbridge’s group head of private equity, Alex Di Santo.
The survey, which compiled responses from 101 senior buyout, growth, private debt, VC, real estate and infrastructure executives globally, found a smaller number in market than a year prior.
Tempting (and fraught) market beckons.
GPs acknowledge fundraising is difficult, but they have perhaps surprising lofty expectations for the near term
Half-year fundraising dropped by a fifth year-on-year to $315.5bn across just 508 vehicles that held final closes over the period.