Many private equity GPs are facing a question tied to continuation vehicles (CVs) becoming an increasingly popular exit route: how to retain and recycle the capital that comes from those CV transactions, according to Private Equity Wire.
Private Equity Wire reports that its research finds liquidity generation for LPs is currently the biggest use case for continuation vehicles, and that the investor experience through the continuation vehicle process can be pivotal for future capital relationships, according to Private Equity Wire.
Continuation vehicles framed as an increasingly popular exit route
Continuation vehicles are described as becoming an increasingly popular exit route in the Private Equity Wire report, according to Private Equity Wire.
The report centers on the capital management question for GPs in connection with that rise in continuation vehicle usage: retaining and recycling capital from continuation vehicle transactions.
Research: LP liquidity generation is the biggest current use case
Private Equity Wire states that its research finds liquidity generation for LPs is the biggest current use case for continuation vehicles.
The report links this use case to the broader continuation vehicle ecosystem by describing liquidity for LPs as what CVs are currently most used for.
Investor experience highlighted as pivotal for future capital relationships
Private Equity Wire says the investor experience through the continuation vehicle process can be pivotal for future capital relationships.
The report connects this investor experience point to the continuation vehicle process specifically, emphasizing that how LPs experience the process may influence future capital relationships.
Widely known context on continuation vehicles
Continuation vehicles are widely known in private markets as transactions that can offer existing LPs a liquidity option while allowing a GP to continue holding an asset in a new vehicle.
Continuation vehicles are also widely known to involve choices for existing investors that can include selling for liquidity or rolling exposure into the continuation structure.
