From proof of concept to lasting record
The secondaries industry is stepping up its reporting of the performance of continuation fund exits as the supply of opportunities continues to outstrip the available capital for these deals.
The secondaries market is stepping up its monitoring of continuation fund performance as the battle for LP dollars intensifies.
New research from PJT Partners tracks the performance of a number of continuation fund exits, following on from the project it began last year. It shows five single-asset continuation funds have realised gross multiples of invested capital of between 1.8x and 3x to investors within those vehicles. A $500 million multi-asset continuation fund with an around three-year hold delivered an over-3x return, while a €250 million single-asset continuation fund with a similar hold period delivered a 4.5x return.
This follows Evercore ’s recent study with the HEC School of Management in Paris, which showed single-asset continuation funds provide more consistency in returns than buyout funds and similar performance.
The report found single-asset continuation vehicles between the 2019-23 vintages achieved an average total value to paid-in ratio of 1.499x, closely aligned with the performance of 2019-vintage buyout funds, which generated an average TVPI of 1.513x. However, single-asset CVs have exhibited lower return dispersion than their buyout counterparts, indicating lower return variability.
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