Senior executives from Leonard Green & Partners, Hamilton Lane, Carlyle and Bain Capital have defended the growing use of continuation funds, arguing that the structures provide liquidity and support longer-term value creation despite investor concerns over potential conflicts of interest, according to a report by Bloomberg.
Speaking at the Global Financial Leaders’ Investment Summit in Hong Kong, Leonard Green managing partner Jonathan Sokoloff acknowledged resistance among limited partners but said continuation vehicles had become a permanent feature of the private equity market.
Hamilton Lane co-CEO Juan Delgado-Moreira reportedly argued that independent valuations and investor advisory committee approvals help address these concerns. He said assets transferred into continuation vehicles had historically generated average investment multiples of approximately four times, outperforming top-quartile buyouts.
Meanwhile, Carlyle co-president John Redett said higher interest rates were shifting the industry towards operationally driven returns, placing greater emphasis on active value creation. Bain Capital chairman John Connaughton suggested the changing environment could usher in a new period of strong private equity performance.
