Video
In which market environments are CVs most valuable?
Continuation vehicles can be a very powerful tool, not just in performing environments, but also in markets of uncertainty.
One of the most common misconceptions about continuation vehicles is that they are simply a product of market stress — a workaround born out of elevated interest rates or a sluggish M&A environment. The reality is more nuanced.
Continuation vehicles have proven valuable across a range of market conditions. Their growth has been persistent through challenging periods, but 2021 — a record year for private equity M&A — demonstrates they thrive in strong markets too. Their appeal is not contingent on adversity; it is rooted in structural flexibility.
In more turbulent markets, however, the value proposition sharpens. Sponsors naturally look inward, toward companies they know and understand deeply, maintaining ownership in businesses where they believe the next phase of growth remains ahead.
For investors, the benefit is complete optionality — the ability to take distributions in a liquidity-constrained environment, or to double down and concentrate capital behind proven, high-performing businesses positioned for future growth.
Speaker
Nick Lawler
Managing Director, Head of Secondaries
Churchill
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