The rise of "continuation" investments in the private markets sector speaks to the maturation process, evolution of approaches to liquidity, and more.

As a sign of further private market development, a new report by Schroders Capital predicts that the sector known as global continuation investment – or GP-led secondaries – could clock up volumes greater than $330 billion by 2035.

Total deal value rose from a revised $76 billion in 2024 to a new record of $109 billion in 2025, the firm said. 

As explained by Germany-headquartered Moonfare in a 12 May note this year, a continuation fund is a private equity vehicle designed to extend the holding period of one or more assets from an existing fund that has reached or is approaching the end of its lifecycle. These funds’ main reason to exist is to allow fund managers (general partners) to keep control over promising assets while providing liquidity options to existing investors (limited partners) who may wish to exit.

The maturation of private market investing, including some challenges from the post-pandemic interest rate spike, has seen the rise of secondaries – buying and selling pre-existing investment stakes, continuation funds, and more. 

Schroders Capital said its forecast is based on forces that are extending private equity ownership beyond initial holding periods under the same ownership, as well as investor demand for investments with reduced risk, more predictable returns, faster liquidity and lower fees. 

“Over the past year, the trends we identified have not only persisted, but accelerated, with continuation investments further embedding themselves as a core feature of the private equity landscape rather than a short-term response to challenging exit market conditions,” Nils Rode, chief investment officer, Schroders Capital, said.

“Our analysis clearly demonstrates that continuation investments are neither cyclical nor temporary in nature. Underlying structural forces continue to underpin the market, with projected growth expectations revised upwards,” Rode added. 

In base case forecasts, Schroders Capital said it expects total continuation investment volumes to increase from around $109 billion in 2025 to more than $330 billion by 2035.

The cyclical tailwind for continuation investments contributed about 9 per cent of the transaction volume in 2025, down from 14 per cent in 2024. 

Drivers of the growth include: continued private equity ownership beyond the original holding period – an established way of driving company transformation; company transformation under private equity ownership which often does not require a change in owner; continuation investments are a cost-effective way of delivering transformation; continuation investments have more predictable returns and faster liquidity compared with traditional buyouts; and the current cyclical exit gap is accelerating demand for alternative liquidity solutions.

Not so new 
Schroders Capital said the concept of businesses remaining in the private equity ecosystem after their original holding period is not new. Sponsor-to-sponsor buyouts, where one fund manager sells a portfolio company to another, have represented a significant share of exits for more than two decades, averaging 38 per cent of deal count and 36 per cent of deal value since 2006, it said. 

Schroders Capital is the private markets arm of Schroders, the UK-listed group that is in the process of being purchased by US-based Nuveen.