Private equity executives defend continuation funds amid LP concerns
Senior executives from Leonard Green & Partners, Hamilton Lane, Carlyle and Bain Capital have defended the growing use of continuation funds, arguing that the structures provide liquidity and support longer-term value creation despite investor concerns over potential conflicts of interest, according to a report by Bloomberg.
Executives from major private equity firms have voiced support for continuation funds, despite investor worries about potential conflicts of interest, according to Bloomberg. At the Global Financial Leaders’ Investment Summit in Hong Kong, Leonard Green managing partner Jonathan Sokoloff admitted that some limited partners are wary of these structures.
However, he maintained that continuation vehicles have become a staple of the private equity industry. Hamilton Lane co-CEO Juan Delgado-Moreira argued that independent valuations and investor advisory committee approvals serve to alleviate these concerns. He noted that assets placed in continuation vehicles have historically generated investment multiples around four times, surpassing top-quartile buyouts.
Carlyle co-president John Redett pointed out that higher interest rates are steering the industry towards operationally driven returns, with a greater focus on active value creation. Bain Capital chairman John Connaughton hinted that this evolving landscape could signal a new era of robust private equity performance.
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