Continuation funds in private equity

May 2026

Continuation funds have shifted from a niche liquidity tool to a core feature of the private equity landscape, and that rise has brought a corresponding increase in dispute risk, particularly around valuation when assets move from an older fund to an affiliated continuation vehicle.

GP-led continuation transactions are now sufficiently large, frequent, and complex that they demand robust process discipline and valuation rigor to avoid litigation or arbitration. The data shows record secondaries activity through 2024 and into 2025, with continuation funds accounting for a growing share of GP-led volume and, importantly, a double-digit share of sponsor-backed exit activity. Against that backdrop, recent challenges filed in Delaware Court of Chancery illustrate how compressed timelines, information asymmetries, and fee or carry resets can catalyse disputes, often with valuation at the centre.

This article synthesises current market dynamics and the dispute typologies most likely to surface in order to offer practical guidance for sponsors and investors on process design, valuation workstreams, and dispute readiness.