Continuation Vehicles in 2026: Market Growth, Governance Evolution, and Independent Valuation Requirements
Essential Insights for General Partners, January 2026
Insights informed by industry insights and market research.
Executive Summary
For general partners navigating continuation vehicle transactions, robust governancy is no longer best practice, it’s a regulatory and commercial imperative.
Continuation vehicles (CVs) have evolved from niche liquidity solutions into mainstream portfolio management tools with transaction volume growing 40% year-over-year in 2024.
In an environment marked by constrained exits, heightened LP liquidity needs, and abundant secondary capital, CVs enable sponsors to extend hold periods for high-quality assets while offering optional liquidity to existing investors.
The complexity—and stakes—are rising. Cross-fund asset transfers, multi-asset vehicles, and larger transaction sizes have raised the bar for governance, process discipline, and regulatory scrutiny.
Regulators including SEC and UK Financial Conduct Authority are intensifying scrutiny of GP conflicts. LPs and their advisors are demanding transparency and independent validation. Secondary buyers are conducting deeper diligence before committing capital.
Independent valuations and fairness opinions have shifted from optional enhancements to essential governance requirements.
This article examines:
- Market drivers: What's fueling CV growth and structural complexity
- Governance evolution: How standards have tightened in 2024-2025
- Regulatory landscape: Emerging scrutiny from SEC, FCA, and institutional LPs
- Best practices: Why independent valuations are central to defensible transactions
The cost of governance failures has never been higher. As continuation vehicles become more prevalent and complex, sponsors need advisors who deliver technically rigorous, audit-defensible opinions that withstand LP scrutiny and regulatory review.
As a result, independent valuations and fairness opinions are increasingly viewed as best practices rather than optional enhancements.
Why Continuation Vehicles Are Gaining Momentum
The sustained rise in continuation vehicles reflects their ability to address multiple market pressures simultaneously:
- Challenged exit environments: Slower M&A and IPO markets have made traditional exits less attractive or less certain.
- LP liquidity needs: Investors continue to seek liquidity amid portfolio rebalancing, denominator effects, and extended hold periods.
- GP alignment and asset conviction: Sponsors increasingly wish to retain exposure to “trophy” assets with remaining growth runway.
- Expansion of secondary capital: Dedicated GP-led secondary funds have scaled significantly, providing reliable demand for CV transactions.
Together, these forces have positioned continuation vehicles as a widely accepted alternative exit and portfolio optimization strategy.
Continuation Vehicle Market Growth: 2024 Data
The CV market experienced significant expansion in 2024:
- GP-led secondary volume: +50% year-over-year
- Median transaction size: Significantly larger deals
- Deal structures: Increasing complexity (43% now multi-asset)
This growth reflects both higher transaction volume and larger deal sizes—signaling CVs have evolved from episodic liquidity solutions to core portfolio management tools.
What this means for sponsors: LPs expect more sophisticated governance; secondary buyers conduct deeper diligence, and regulatory scrutiny intensifies as market visibility increases.
Deal Structure
CVs Are Growing More Complex
Single-asset CVs remain the majority of transactions, multi-asset structures are gaining share: In 2024,
- 57% of CVs were single-asset,
- 43% of CVs were multi-asset structures
More than half of multi-asset CVs involved assets held across two or more sponsor funds, introducing additional complexity around valuation allocation, governance, and disclosures.
As these transactions grow in size and sophistication, sponsors and their advisors face heightened expectations around transparency, documentation, and defensibility of process.
Where CVs are Happening: Strategy and Sector Trends:
CVs remain buyout-focused, though diversification is underway:
- Buyout strategies accounted for approximately 92% of CV transactions.
- Venture and growth strategies represented roughly 6%, with credit strategies making up the balance.
- From an industry perspective, technology led transaction volume, followed by industrials and energy/infrastructure.
The emergence of venture and growth assets is notable given the valuation sensitivities and information asymmetries often present in those strategies.
Governance Expectations and Best Practices
Continuation vehicles are inherently GP-led transactions, creating real or perceived conflicts of interest that demand robust governance. As transaction complexity increases, institutional LPs, auditors, and legal counsel now expect these elements as standard. Best practices increasingly include:
- Engagement of independent valuation advisors
- Fairness and valuation opinions for affiliate or GP-led transactions
- Active LPAC involvement
- Clear documentation of assumptions, methodologies, and decision-making processes
These are no longer optional enhancements; they are baseline requirements for well-structured CV transactions.
Regulatory Scrutiny
- Regulators are paying closer attention to continuation vehicles, particularly around conflict management and LP protection: In the U.S., guidance and expectations have historically been shaped by the SEC and ILPA.
- More recently, regulators such as the UK Financial Conduct Authority (FCA) have increased scrutiny on conflicts and governance in private fund asset transfers.
What this means for sponsors: Independent valuation opinions provide regulatory defensibility. Process transparency matters as much as pricing fairness. Global sponsors must navigate multiple regulatory frameworks—making thorough documentation and independent oversight essential, not optional.
Three Critical Implications for General Partners
- As CVs become more prevalent and sophisticated, general partners must adapt their approach: Independent valuation is no longer optional: Independent fairness opinions have shifted from “nice to have” to baseline expectations for institutional LPs. Even straightforward transactions now require independent validation.
- Speed and coordination Matter More Than Ever: These transactions already involve significant coordination across GPs, LPs, counsel, auditors, and secondary buyers. The sponsors who execute most effectively work with advisors who understand private equity workflows, respond quickly, and can navigate complex stakeholder dynamics without creating bottlenecks.
- Governance Affects Long-Term Credibility: Poor governance on a single CV can damage sponsor credibility for years. The short-term cost of robust governance is far lower than the long-term cost of LP relationship damage, fundraising challenges, or regulatory scrutiny.
Houlihan Capital Perspective
Our clients come to us when they need independent valuations and fairness opinions that combine technical rigor with practical execution:
✓ Technical Rigor
Our opinions withstand LP scrutiny, audit review, and regulatory examination. We bring specialized expertise across private equity, venture capital, and alternative investments.
✓ Process Efficiency
We respond quickly, integrate seamlessly with transaction teams, and deliver credible opinions without creating delays.
✓ Stakeholder Confidence
Our independence and track record give LPs, auditors, and boards confidence in transaction fairness—with clear communication and thorough documentation.
With over 30 years advising on high-stakes transactions, we understand that governance isn't about checking boxes—it's about protecting relationships and executing transactions that withstand scrutiny.
About Houlihan Capital
Houlihan Capital is an employee-owned valuation and investment banking firm specializing in independent fairness opinions, business valuations, and transaction advisory for private equity sponsors, institutional investors, and their advisors.
Our expertise spans:
- Private equity (buyout, growth, venture)
- Alternative investments (crypto, cannabis, specialty finance)
- Complex transaction structures (CVs, recapitalizations, affiliate transactions)
Founded in 1996 and based in Chicago, we've advised on thousands of high-stakes transactions requiring independent oversight, technical precision, and stakeholder confidence.
Contact us to discuss your continuation vehicle transaction.
