Private equity firms face a critical challenge: how to manage portfolio companies that continue performing well beyond their original fund’s lifecycle. Traditional exit timelines no longer align with the extended holding periods needed to maximize value creation, particularly as higher interest rates and selective buyer markets constrain conventional exit routes. This tension between investment performance and liquidity demands has led to the emergence of continuation vehicles as mainstream industry tools.
As managing partner of a San Francisco-based private equity firm and founder of his family office, Lupine Crest Capital, J-P Conte has built his career on deploying patient capital and creating long-term value. His investment philosophy—emphasizing operational transformation over financial engineering—positions him well for an era where continuation funds offer sponsors the flexibility to hold high-conviction assets beyond traditional fund terms.
Continuation Vehicle Market Reaches Critical Mass
Market data reveals a compelling transformation in how private equity manages portfolio exits. GP-led secondary transactions, primarily consisting of continuation vehicles, grew from approximately $9 billion in 2016 to $68 billion in 2021. During the first half of 2025 alone, continuation fund transactions totaled $41 billion, marking a 60% year-over-year increase and accounting for 19% of all private equity exits.
According to Bain’s 2025 Global Private Equity Report, the number of continuation vehicles has grown fourfold over the past five years, while total value increased almost threefold. These vehicles now represent close to 90% of GP-led secondaries volume, underscoring their transformation from exceptional transactions to standard operating procedure. Major firms, including KSL Capital Partners and Astorg, raised multibillion-dollar continuation funds in 2024, reflecting widespread adoption across the industry.
Several converging factors drive this growth: longer value creation timelines, persistent LP demand for liquidity, and a challenging exit environment that has left sponsors managing $3.6 trillion in unrealized value across 29,000 unsold companies. Higher interest rates have fundamentally altered return profiles, requiring sponsors to deliver substantially greater earnings growth to achieve target IRRs. For instance, achieving a 20% IRR with a 7% interest rate and a seven-year holding period now demands 4.2% annual earnings growth—more than double the 1.7% requirement at 3% interest rates.
Extended Holding Periods Enable Deeper Value Creation
Continuation vehicles operate by transferring one or more assets from an existing fund approaching the end of its lifecycle into a newly established vehicle managed by the same private equity firm. This structure allows general partners to maintain ownership of high-performing assets while providing existing limited partners with optionality: they can either cash out at current valuations or roll their stakes into the new fund.
J-P Conte’s investment approach emphasizes the importance of giving portfolio companies sufficient time to reach their full potential. His career has been built on operational value creation—working closely with management teams to drive revenue growth, implement initiatives, and build sustainable competitive advantages. Continuation vehicles align naturally with this philosophy, enabling sponsors to extend holding periods when additional time can generate meaningful incremental value.
Continuation vehicles have gained prominence as an option for sponsors seeking liquidity for investors without having to exit high-performing assets prematurely, according to Mintz’s 2025 Private Equity Trends Outlook. Unlike transient trends, these vehicles provide sustainable solutions in today’s constrained exit market, offering flexibility that traditional exit opportunities lack. Sponsors increasingly view them as tools to rebalance LP pools, manage specific assets, and maintain growth within their portfolios.
Recent transactions demonstrate the scale these vehicles can achieve. Vista Equity Partners raised a record $5.6 billion continuation fund to retain a stake in Cloud Software Group, while Inflexion sold four portfolio companies to a new £2.3 billion vehicle it manages. These transactions allow general partners to crystallize carried interest while maintaining control over assets they believe have additional upside.
For J-P Conte, the rise of continuation funds represents a development of the private equity model. Traditional 10-year fund structures, while effective for many investments, can force premature exits when assets require longer development timelines. Healthcare technology investments, software platforms transforming, or industrial businesses implementing complex operational improvements may need extended holding periods to capture full value—precisely the scenarios where continuation vehicles offer the most utility.
Balancing Long-Term Capital Deployment With Investor Alignment
Continuation funds enable sponsors to rebalance LP pools, bringing in investors whose return expectations and risk tolerance align with an asset’s current stage of development. An investment that may no longer fit the return profile required by a maturing fund can still offer compelling opportunities for new capital seeking exposure to proven, de-risked assets with shorter remaining holding periods.
J-P Conte understands the value of this alignment. His work across healthcare, software, financial services, and industrial technology has required tailoring investment horizons to sector-specific value creation cycles. Healthcare technology platforms often need extended periods to achieve regulatory milestones and scale commercial operations. Software businesses may require multiple years to complete platform migrations or achieve critical mass in new markets. Continuation vehicles provide the structural flexibility to match capital to these realities.
Continuation vehicles appear positioned for sustained growth rather than cyclical popularity. PwC’s 2025 midyear outlook notes that longer hold periods are prompting increased use of continuation funds, secondaries, and alternative liquidity approaches as sponsors adapt to elevated interest rates requiring greater operational performance to achieve target returns. Structural drivers—extended value creation timelines, selective exit markets, and LP liquidity needs—suggest these vehicles will remain integral to private equity portfolio management.
For J-P Conte, whose investment philosophy emphasizes patient capital and operational transformation, continuation funds represent a natural progression of the private equity model. They provide the temporal flexibility needed to execute complex value creation plans while maintaining alignment with investor preferences. As the industry manages $3.6 trillion in unrealized value, the ability to extend holding periods for high-performing assets without forcing premature exits offers a critical tool for maximizing returns and meeting fiduciary obligations to limited partners.
