Continuation Vehicles: Worth the Wait?

September 15, 2026 | Amy Miller, Associate Director of Private Equity

Over the past decade, continuation vehicles (“CV”) have become one of the fastest-growing trends in private equity. Private equity funds typically have a fixed lifespan, often around ten years. During that period, the fund buys companies, works to improve them, and ultimately sells them to generate returns for investors. However, not every company reaches its full potential within that timeframe. In fact, there has been much ado about “Zombie” portfolio companies as aging assets face limited and increasingly challenging exit opportunities.

A CV allows a private equity manager, or general partner (“GP”) to continue owning a company beyond the life of the original fund. The GP transfers the company into a newly created investment vehicle and raises new capital from investors to purchase interests from those who opt for liquidity. Existing investors can choose to sell and receive cash or remain invested in the company through the new structure.

Once considered a niche solution, CVs have become a mainstream feature of the private equity market. Supporters argue that they allow GPs to maximize value by giving strong companies more time to grow. Critics counter that they introduce conflicts of interest and make it harder to assess whether investors are receiving fair value. As use of these structures continues to expand, investors should understand both the benefits and the risks before embracing them as a permanent solution to today’s liquidity challenges.

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