Key Takeaways
- • Schroders Capital projects continuation investment volumes will surge from $109 billion in 2025 to more than $330 billion by 2035, representing a more than threefold increase over the decade.
- • Total deal value in the continuation investment market increased 43% year-over-year, rising from a revised $76 billion in 2024 to $109 billion in 2025, marking a new record.
- • Continuation funds (GP-led secondaries) extend the holding period of assets from existing funds nearing end-of-life, allowing general partners to maintain control while providing liquidity options to limited partners seeking earlier exits.
- • The growth is driven by structural market forces: private equity ownership extension beyond initial holding periods, investor demand for lower-risk investments with predictable returns, faster liquidity access, and reduced fee structures relative to traditional fund vehicles.
- • Continuation investments now represent approximately half of total annual secondaries volume, establishing themselves as a core feature of the private equity landscape rather than a cyclical response to challenging exit conditions.
Summary
Schroders Capital's latest market analysis forecasts a substantial expansion of the global continuation investment sector over the next decade, with volumes projected to exceed $330 billion by 2035—more than triple current levels. The 2025 baseline of $109 billion represents a significant acceleration from the revised 2024 figure of $76 billion, a 43% year-over-year increase that underscores accelerating momentum in the GP-led secondaries market.
Continuation funds operate as specialized private equity vehicles designed to extend the investment holding period of assets from existing funds that have reached or are approaching their contractual end-of-life. These structures serve dual purposes: they enable general partners (fund managers) to maintain operational control and capture additional value from performing assets, while simultaneously offering limited partners (institutional investors) early liquidity options and exit flexibility without forcing the underlying asset sales at potentially inopportune times.
According to Nils Rode, Chief Investment Officer at Schroders Capital, the structural trends underlying this growth have not only persisted but accelerated over the past year. "Continuation investments are further embedding themselves as a core feature of the private equity landscape rather than a short-term response to challenging exit market conditions," Rode noted. The forecast is anchored to observable market forces extending private equity ownership tenures beyond initial fund lifecycles, combined with persistent investor preference for investments offering reduced risk profiles, more predictable cash flow returns, enhanced liquidity compared to traditional long-dated fund structures, and lower fee burdens.
The maturation of private market investing—catalyzed in part by post-pandemic interest rate increases that have reshaped exit timing and refinancing dynamics—has elevated secondaries activity broadly. Continuation funds now constitute approximately half of total annual secondaries volume, reflecting their transition from a niche liquidity tool to a mainstream capital allocation mechanism. This structural embedding across the institutional investor base, coupled with the combination of GP optionality and LP flexibility that continuation vehicles provide, positions the market for sustained growth well beyond the 2035 projection window.
Continuation funds operate as specialized private equity vehicles designed to extend the investment holding period of assets from existing funds that have reached or are approaching their contractual end-of-life. These structures serve dual purposes: they enable general partners (fund managers) to maintain operational control and capture additional value from performing assets, while simultaneously offering limited partners (institutional investors) early liquidity options and exit flexibility without forcing the underlying asset sales at potentially inopportune times.
According to Nils Rode, Chief Investment Officer at Schroders Capital, the structural trends underlying this growth have not only persisted but accelerated over the past year. "Continuation investments are further embedding themselves as a core feature of the private equity landscape rather than a short-term response to challenging exit market conditions," Rode noted. The forecast is anchored to observable market forces extending private equity ownership tenures beyond initial fund lifecycles, combined with persistent investor preference for investments offering reduced risk profiles, more predictable cash flow returns, enhanced liquidity compared to traditional long-dated fund structures, and lower fee burdens.
The maturation of private market investing—catalyzed in part by post-pandemic interest rate increases that have reshaped exit timing and refinancing dynamics—has elevated secondaries activity broadly. Continuation funds now constitute approximately half of total annual secondaries volume, reflecting their transition from a niche liquidity tool to a mainstream capital allocation mechanism. This structural embedding across the institutional investor base, coupled with the combination of GP optionality and LP flexibility that continuation vehicles provide, positions the market for sustained growth well beyond the 2035 projection window.
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