Rethinking exits in private equity: Why continuation vehicles are redefining the playbook

Continuation vehicles are becoming a durable portfolio-management and exit tool because they let sponsors retain high-conviction assets while offering liquidity and growth capital without forcing a sale.

• Around 60% of sponsors plan to increase their use of GP-led transactions over the next two to three years, while 48% of 2025 CV sponsors were first-time issuers and 93% of completed-CV GPs want to do another one.
• Continuation vehicles captured an estimated 10–15% or more of sponsor-to-sponsor M&A volume, and their share reached approximately 14% of sponsor exits in 2025, roughly triple its level five years earlier.
• The IPO route is structurally less attractive for traditional buyouts: IPO discounts can approach 15–20%, and the number of publicly listed U.S. companies has fallen by about 50%, from 8,000 in the mid-1990s to roughly 4,000.
• CVs remain relevant even if M&A recovers because they provide primary capital—secondary investors can contribute 20% or more of total commitments—for follow-on acquisitions and other growth initiatives, while aligning sponsors, co-investors and management teams.
• The market is concentrated mainly in middle- and upper-middle-market companies with enterprise values of approximately $500 million to $3 billion, which are generally less suited to public markets; CVs can also preserve governance continuity and give management partial liquidity while retaining upside.

Takeaway: Blue Owl expects CVs to become more frequent, larger and more institutionalized, but investors must weigh their benefits against concentrated exposure, valuation complexity, possible GP-LP misalignment and extended illiquidity.