Continuation fund

A new fund a private equity firm creates to keep owning one or more companies past the original fund's life, with new investors buying in.

Checked 9 Oct 2026 · 2 sources

What is a continuation fund?

A continuation fund is a new vehicle a private equity firm creates to keep owning one or more companies past the original fund's life. The firm sells the company from the old fund to the new one. Existing investors choose to cash out or roll into the new fund, and secondary investors supply fresh capital. Because the firm sits on both sides, third parties usually set or check the price.

Why it matters to a revenue leader

For a portfolio company, a continuation fund means the same owner for more years, often with new capital for add-ons. It also resets the clock: the sponsor needs a fresh growth plan and a new exit story. A revenue leader should expect new diligence, a revised value creation plan and possible changes to management incentives.

Example

Fictitious numbers

Seven years into a hold, a sponsor moves a fire protection platform into a continuation fund. Most of the old fund's investors take cash, and new investors commit $150M for more acquisitions. The CRO's plan now runs on a new four-year horizon.

The question to ask

"If our owner extended the hold through a continuation fund, what would the new plan ask of sales?"

Sources

  1. Continuation Funds: What You Need To Know (Harvard Law School Forum on Corporate Governance) checked 9 Oct 2026
  2. The Rise of Private Equity Continuation Funds (Harvard Law School Forum on Corporate Governance) checked 9 Oct 2026

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