For the first time in four years, fund managers moved more secondary volume than the investors seeking to exit them.
Secondary transactions in private markets reached a record $121 billion in the first half of 2026, according to Evercore data reported by Bloomberg. Manager-led transactions, primarily continuation vehicles, accounted for 54% of that volume. The structure that began as a workaround for a slow exit environment has become a standard tool of private capital, and the market has changed shape around it.
The composition has shifted
Continuation vehicle activity is no longer only a private equity buyout story. Private equity still represented about two-thirds of manager-led volume in the first half of 2026, but infrastructure accounted for 16% and private credit for 11%. Software-related continuation funds made up 10% of total secondary volume, down from 18% a year earlier, as investors reassessed software companies facing potential disruption from artificial intelligence.
Evercore has characterized the market’s growth as increasingly structural rather than simply a response to difficult exit conditions. The logic holds up. Continuation vehicles let managers keep assets they believe still have significant value-creation potential, past the point a fund timeline would otherwise force a sale. Limited partners get liquidity to rebalance portfolios or fund new commitments. And single-asset continuation funds, the dominant transaction type in the period, can command higher pricing than diversified vehicles despite carrying greater concentration risk.
None of that is a problem. The problem is what sits underneath it.
The conflict is structural, not incidental
In a continuation vehicle transaction, the sponsor that values and transfers the asset is also the manager of the vehicle receiving it. The same party sits on both sides of the trade.
That raises questions limited partners reasonably ask. Does the transfer price reflect fair value, or the sponsor’s incentive to present a strong exit for the original fund? Do the terms advantage incoming investors over those rolling over, or the reverse? Does the valuation account for execution risk alongside upside?
As the structure has scaled, an independent fairness opinion in connection with the transfer has become an increasingly common response. This is not a regulatory requirement. It is market practice, and it emerged because the alternative is asking limited partners to take the sponsor’s valuation on faith in a transaction where the sponsor has an interest in the outcome. Regulators are paying attention to valuation as well: SEC staff recently reminded private fund managers to maintain rigor in how private assets are valued and how those valuations are disclosed to investors.
What the opinion actually does, and what it does not
An independent fairness opinion provides a view on whether the consideration is fair, from a financial point of view, as of the opinion date and subject to the assumptions and limitations set out in the opinion itself.
The analysis behind it typically examines the valuation of the transferred asset using income, market, and transaction-based methodologies as the asset and data support. It considers the structure, fees, and terms against limited partner interests and observable market norms. And it examines how the terms treat rolling and new investors relative to one another, including liquidity elections and any preferred or structured return features.
What it does not do matters equally. A fairness opinion is not a legal conclusion, not a solvency determination, not a recommendation on whether any investor should participate, and not a prediction of future performance. It is an analytical view, on a specific question, as of a specific date. Sponsors and advisors who understand that scope use the opinion appropriately within a broader process rather than treating it as a substitute for one.
Diversification has raised the analytical bar
The spread of continuation vehicles across asset classes has a practical consequence that gets less attention than the volume figures. The questions differ materially by sector.
Infrastructure assets are long-duration with comparatively stable cash flows, and the analysis centers on cost of capital, terminal value, and regulatory drivers. Private credit continuations require fluency in loan-level cash flows, credit spreads, and recovery assumptions. Real estate turns on appraisal methodology, capitalization rates, and local supply. Energy assets require commodity forecasting and reserve life analysis. Healthcare requires familiarity with reimbursement dynamics and consolidation multiples. Software valuation discipline has become more consequential, not less, following recent repricing.
A provider evaluating an infrastructure continuation vehicle is answering different questions than one evaluating a software portfolio. Asset-class-specific analysis is central to credible work here.
A representative engagement
Houlihan Capital delivered a fairness opinion to the special committee of a private equity fund in a $425 million GP-led continuation vehicle transaction involving material conflicts of interest, including limited partner rollover elections, differential liquidity options, and preferred equity issuance. The analysis used income, market, and transaction-based methodologies, assessed the proposed capital structure and distribution mechanics, and evaluated the financial implications to both rolling and cashing-out investors. The opinion concluded that the consideration to be received by the non-rolling limited partners was fair, from a financial point of view, as of the date of the opinion. The engagement included formal Fairness Opinion Committee review and presentation of findings to the special committee.
Where this goes
At $121 billion in the first half of the year, continuation vehicles are a structural component of how private capital operates rather than a niche. The diversification across asset classes creates opportunity and raises the analytical demands on everyone evaluating these transactions.
For sponsors, independent fairness opinions are increasingly expected. For limited partners and advisors, they provide an analytical reference point in assessing terms that a sponsor’s own valuation cannot supply.
Houlihan Capital provides independent fairness opinions and valuation services in connection with continuation vehicle and adviser-led secondary transactions across asset classes. Fairness opinions are issued through Houlihan Capital’s FINRA-registered broker-dealer and reviewed by a fairness opinion committee that includes broker-dealer principals. To discuss a transaction under consideration, contact our team at info@houlihancapital.com or 312.450.8600
Sources
Private Equity Wire, “Trophy” assets push private markets secondaries to record $121bn, July 22, 2026, reporting Bloomberg coverage of Evercore data. Source for all market figures above.
SEC staff statement on fair value measurement and disclosure considerations for private assets, as summarized in McDermott Will & Schulte, “SEC calls for rigor in private credit valuation practices, disclosures,” October 1, 2026.
