Are continuation funds becoming the new normal?

Private equity exits remain challenging, IPO markets are selective, strategic buyers are cautious and valuation gaps continue to delay transactions. As a result, continuation funds and general partner led secondaries have moved from a niche solution to a core portfolio management strategy. 

For fund managers, the question is no longer whether to use continuation vehicles, but how to structure them effectively and ensure they stand up to investor scrutiny. If continuation funds are part of your strategy for 2026, having the right operating model in place is every bit as important as selecting the assets themselves.  

This article explains how continuation funds are being used in today's market, the operational challenges managers need to anticipate, and how to prepare your fund, team and infrastructure for a successful GP‑led transaction. 

Why use continuation funds? 

Continuation funds allow managers to retain high conviction assets while offering limited partners (LPs) a choice: liquidity today or continued exposure to future upside. 

This flexibility helps mangers address several pressures, including: 

• avoiding value destructive sales in weak markets 
• resetting fund life where assets need more time to mature 
• providing liquidity to LPs managing allocation constraints 
• extending relationships with high quality investors 

In today's investment environment, continuation vehicles are increasingly part of the standard liquidity toolkit, alongside traditional exits and secondary portfolio sales. 

Investor expectations are rising 

While LP acceptance has grown, continuation transactions face closer scrutiny than traditional exits. Investors are focused on: 

• valuation transparency and independent fairness 
• conflict management between existing and new investors 
• governance and disclosure standards 
• clear alignment of fees, terms and economics 

Managers that treat continuation funds as a strategic process, rather than a last-minute solution, are better positioned to secure investor support. 

The operational reality 

Continuation vehicles bring complexity that many fund operating models were not built to handle. Managers must handle parallel investor elections and onboarding, multi-party closing mechanics, enhanced reporting requirements and accurate, arm’s-length valuations and audit readiness. 

Without the right infrastructure, these steps can quickly become bottlenecks. Operational capability is becoming a real differentiator - especially for managers running multiple continuation vehicles or holding diverse portfolios. 

Strong fund administration helps: 

• streamline investor elections and onboarding, reducing delays 
• provide integrated reporting and facilitate transparent communication with investors 
• support complex closing mechanics and track multiple capital flows accurately 
• maintain ongoing compliance and governance throughout the fund’s lifecycle 

A reliable fund administrator not only ensures efficiency but also supports manager credibility during investor due diligence. 

Looking ahead: from exit alternative to portfolio tool 

The secondary market is now a pillar of private capital. Continuation funds are being used proactively to manage portfolio concentration, optimise hold periods and create optionality for both GPs and LPs. 

Fund managers that are able to integrate continuation planning into their lifecycle strategy, rather than reacting to market conditions, will have greater flexibility when exit windows narrow. 

How Ogier Global can help 

Ogier Global, Ogier's corporate and fiduciary division, supports fund managers with the establishment and administration of continuation and secondary vehicles, including GP led transactions. Our team provide governance, investor administration and operational support needed to execute efficiently and maintain investor confidence. 

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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