Why the GP-Led Continuation Vehicle Boom Should Worry LPs, Not Reassure Them

Hamilton Lane just led a $270 million single-asset continuation vehicle so Cynosure Partners could keep its decade-old stake in Savant Wealth Management, a firm that's now roughly 25 times larger than it was in 2016. Days later, Monogram Capital Partners closed an Apollo S3-led continuation vehicle for Mountaintop Beverage, with Apollo's secondaries unit backing the deal on top of the roughly $14 billion it has raised since 2022. The industry calls this "liquidity." I call it a GP picking the winner out of the fund, keeping it, and asking limited partners to re-underwrite the same asset on a fresh clock.

Two deals, one pattern

Start with what actually happened. Cynosure Partners bought into Savant Wealth Management around 2016, when Savant was a fraction of its current size. Ten years later, Savant has grown into a $57 billion-plus RIA platform, and Cynosure's fund is old enough that its LPs want their money back. Instead of selling Savant to a third party at a market price and returning cash, Cynosure moved the asset into a new, single-asset continuation vehicle. Hamilton Lane came in as sole lead investor on the $270 million vehicle, and Cynosure stayed invested. The LPs in the original fund got a choice: cash out at the price Hamilton Lane and Cynosure negotiated, or roll into the new vehicle and keep riding the same asset under a new fee and carry structure.

Monogram Capital's deal with Mountaintop Beverage runs the same play with a different sponsor on the buy side. Monogram used an Apollo S3-led continuation vehicle, reportedly around $300 million, with CalPERS among the backers, to return what Monogram describes as "a significant majority" of Fund II capital to its LPs. Monogram keeps managing Mountaintop. Fund II gets marked as a realized win. The asset itself never left the building.

Both deals get pitched the same way: a credible, independent lead investor did the diligence, set a fair price, and gave LPs a real option. Both deals also happen to solve the GP's problem, not just the LP's. The fund is aging, the marquee asset hasn't been sold to an outside buyer, and a continuation vehicle lets the GP call it a realization without actually testing the asset in a real sale process against strategic buyers or other private equity bidders. Coverage of the Savant transaction confirms Cynosure stayed on as an investor in the new vehicle rather than exiting cleanly.

Why this keeps happening: the math for GPs is too good to ignore

This isn't a couple of one-off transactions. GP-led secondaries hit somewhere between $106 billion and $116 billion in 2025 depending on whose numbers you use, roughly half of the entire secondary market, according to the Lazard 2025 Secondary Market Report. The first half of 2026 alone produced about $65 billion of GP-led volume, up 35% year over year, and single-asset continuation vehicles now make up 53% of that GP-led total, per Evercore's H1 2026 Secondary Market Review. Jefferies has found that roughly 80% of the top 100 PE sponsors by assets under management have now done at least one continuation vehicle deal, with average deal size climbing to around $900 million and 29 deals last year exceeding $1 billion.

Metric	Figure	Source
GP-led secondary volume, 2025	~$106B–$116B (roughly 47–53% of total secondary volume)	Evercore PCA / Lazard / Jefferies
H1 2026 GP-led volume	~$65B, up 35% year over year	Evercore PCA H1 2026 Secondary Market Review
Share of GP-led volume from single-asset CVs	53%	Evercore PCA H1 2026 Review
Top 100 sponsors that have completed a CV	~80%	Jefferies 2025 Global Secondary Market Review
Average CV deal size / deals over $1B	~$900M average; 29 deals over $1B	Jefferies 2025 Global Secondary Market Review

When four out of five large sponsors are running the same playbook, that's not an emerging liquidity innovation. That's a standard tool GPs reach for when a fund's marquee holding is too good to sell and too awkward to keep marking at cost. A continuation vehicle solves a very specific problem for the GP: it lets the fund's vintage close out with a strong headline return while the GP keeps collecting fees and, more importantly, resets the carried-interest clock on the same underlying business. New vehicle, new hurdle rate, new preferred return calculation, often a fresh 20% carry running from a lower cost basis than what the original LPs actually paid over the life of the fund. Apollo S3 has raised roughly $14 billion since it launched in August 2022 specifically to lead deals like the Mountaintop transaction. That capital exists because the volume of GP-led deals needing a credible lead is now large enough to support a dedicated multibillion-dollar strategy. The dealmaking has scaled well past the point where each transaction can be treated as an isolated, good-faith liquidity gesture.

The conflict ILPA has been trying to name since 2023

Here's the part the "liquidity solution" framing glosses over: in every one of these transactions, the GP sits on both sides of the trade. As the manager of the aging fund, the GP is the seller with every incentive to get a strong headline price so the old vintage looks good in the next fundraising deck. As the sponsor and manager of the new continuation vehicle, the same GP is effectively the buyer, setting up a structure where it keeps earning fees and carry on an asset it already knows intimately. ILPA's own guidance says plainly that these conflicts are inherent to the structure, not a risk that shows up occasionally. They exist by design, every time.

ILPA's 2023 guidance on continuation funds lays out why the standard safeguards, a fairness opinion and a lead investor, aren't sufficient on their own. A fairness opinion prices the deal the GP designed, using data the GP supplied, on a timeline the GP set. It tells you the price isn't indefensible. It doesn't tell you the price is the best one available, and it doesn't replace a real market test against outside buyers who have no ongoing relationship with the GP to preserve. That's why ILPA has pushed for LPAC conflict-of-interest votes on every continuation vehicle, independent, third-party validation of pricing beyond the fairness opinion alone, and a minimum decision window, generally 30 days, for LPs to actually evaluate their roll-or-sell choice instead of being rushed into a default.

Those recommendations exist because the market didn't self-correct. If fairness opinions and a big-name lead investor were enough, ILPA wouldn't have needed to spend three years building out increasingly specific process guidance. The guidance is a direct response to LPs getting outcomes that were technically defensible and substantively bad for them.

The honest counter-argument, and where it actually holds

I want to be fair to the other side of this, because it's not a strawman. When Apollo S3 or Hamilton Lane leads a continuation vehicle, that is a real underwriting event. These firms are deploying their own capital, doing independent diligence on the asset, negotiating the price against the GP's interests rather than alongside them, and putting their own return targets at risk if the deal is bad. Apollo S3's $14 billion war chest didn't get raised by rubber-stamping GP-proposed prices. Hamilton Lane didn't become one of the largest secondaries investors in the world by overpaying for stakes a seller wanted to unload. A lead investor with real capital at risk is a meaningfully better check than no check at all, and it's a stronger discipline than most LPs could apply on their own, given that most institutional LPs don't have the staff to run an independent valuation of a single portfolio company on a 30-day clock.

For an LP that genuinely wants liquidity now rather than waiting years for an uncertain exit, a continuation vehicle priced by a credible third party is a real option, arguably better than staying trapped in an aging fund with no exit in sight. CalPERS backing the Mountaintop deal isn't a rubber stamp; large pension allocators run their own diligence before committing capital to any secondaries transaction. That's the strongest version of the pro-CV case, and it's true as far as it goes.

Where it stops being enough is the word "option." A priced option with a good lead investor is a real improvement over a forced hold. It is not the same as an arm's-length sale process. The lead investor is pricing against the GP's ask, not running a full auction against every buyer who might value the asset differently, including strategics, other PE funds, or a public listing. LPs who roll into the vehicle are betting on the same manager, the same strategy, and often the same concentration risk they already had, just with a new fee load stacked on top. And the LPs who sell are accepting the lead investor's price as ground truth for an asset that, by definition, the GP didn't want to sell to an unrelated third party at market.

What the boom actually tells you

Look again at Savant Wealth Management. A firm 25 times larger than it was at the original investment is not a distressed asset that needs financial engineering to survive. It's a winner. If Cynosure genuinely believed the best outcome for its LPs was an open sale process, it had a decade of growth and a much larger, more liquid business to show potential acquirers. Instead, the asset moved into a vehicle where Cynosure stays invested and keeps earning economics on it. That's not evidence the fund needed a rescue. It's evidence the GP wanted to keep the good asset and hand LPs the decision of whether to come along, on a valuation Cynosure and Hamilton Lane negotiated between themselves.

Mountaintop Beverage tells the same story from the other direction. Monogram calls the deal a way to return "a significant majority" of Fund II capital while it keeps managing the company. That's a GP choosing to keep operating control of its best asset while booking a distribution that makes Fund II's overall numbers look better heading into its next fundraise. Both deals are dressed as generosity toward LPs. Both deals are, first and foremost, solutions to a GP's problem: an aging fund holding an asset too good to sell honestly and too awkward to keep marking at an old cost basis.

None of this means continuation vehicles are illegitimate or that Hamilton Lane and Apollo S3 are doing bad diligence. It means the standard industry pitch, "this is a liquidity solution for LPs," inverts the actual sequence of events. The GP has a problem. The continuation vehicle solves the GP's problem. LPs get offered a menu with two options, both priced and timed by the party with the biggest stake in the outcome. ILPA built its entire guidance framework, the LPAC conflict vote, the independent price validation, the 30-day minimum window, because that sequence produces bad outcomes often enough that voluntary best practices weren't holding up.

What to ask before you consent

If your GP brings you a continuation vehicle and a roll-or-sell decision, don't stop at reading the fairness opinion. Ask this directly: did anyone run a real, arm's-length process to test whether an unaffiliated third-party buyer, a strategic acquirer, a different PE fund, or a public listing would pay more than the lead investor's price, and if not, why not? If the answer is that the fairness opinion and the lead investor's diligence are the only price discovery that happened, you're not looking at a market-tested valuation. You're looking at a negotiated number between two parties who both have reasons to want the deal to close.

• Ask whether the LPAC voted on the conflict of interest, and whether that vote happened before or after the price was already set.
• Ask what the fairness opinion provider was paid, and by whom, since a GP-commissioned opinion has different incentives than an LP-commissioned one.
• Ask for the full 30-day decision window ILPA recommends, in writing, rather than an informal deadline that pressures a quick roll.
• Ask what changes in fee terms, carry basis, and hurdle rate between the old fund and the new vehicle, in dollar terms, not percentage terms.

A GP that has done real diligence and used a credible lead investor should have straightforward answers to all four questions. A GP that gets defensive about an arm's-length market test is telling you something about which side of the table this deal was really built for.

Related reading: private equity's roll-up playbook, AIN's private equity coverage.

Author Disclosure: Jeff Barnes, MBA has no personal position in any company, fund, or platform named in this article. Angel Investors Network has no current commercial relationship with any party mentioned. AIN provides marketing and education services, not investment advice. Past performance does not guarantee future results. All investments involve risk, including loss of principal.