I recently attended a highly informative breakfast briefing hosted by Real Deals magazine looking at the potential of continuation funds in the private equity industry. As one of the speakers at the event for general partners (GPs), I was able to share my thoughts and hear from high-calibre secondaries investors.
The panel confirmed the strong consensus view that we are seeing a growing appetite for continuation vehicles (CV) in the private equity field. A CV could be an important tool in supporting existing companies they have invested in as an additional alternative route for liquidity.
Setting up a CV allows private equity funds to invest further capital in an asset so it can continue to grow thus providing an alternative to support so-called ‘trophy assets’ providing additional time and resources.
The mood at the briefing is that the time for continuation vehicles has come.
In answer to a question from the panel about levels of CV activity, a majority of the audience said they had either completed a CV or were considering one. It is clear that CVs are front-of-mind for many investors.
A lively private equity secondaries market – which includes CVs – was confirmed in the findings of our latest Secondaries Report. Some 68% of secondaries managers surveyed for the report said they expected to see deal activity increase in 2024 by 10-25%, with 75% saying they will be more active in GP-led deals in the next 12 months.
The mood at the briefing is that the time for CVs has come. The event was also an ideal opportunity to network with GPs and discuss how Investec can support their investment objectives.
You can read the Real Deals article which covers the roundtable discussion, here.
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