Helping restive LPs sell their stakes to secondary funds has saved the hides of many US fund managers, who have been looking for creative ways to return capital to antsy limited partners (for context, see “Restive LPs look to secondaries and creative exits to recoup capital”). Continuation vehicles, which roll over portfolio company stakes from one vehicle to another, are increasingly common — there are even continuation vehicles for continuation vehicles, or CV2s.
In emerging markets, where secondary markets have been slower to develop, impact investors and development finance institutions are trying to jumpstart a resale market that could unlock much-needed liquidity and draw in more investors.
India is leading Asia’s surge in secondary funds and continuation vehicles, according to the Global Private Capital Association, a non-profit membership organization for global private capital providers.
Continuation vehicles give fund managers exits and help them return capital to investors. Secondary funds do this by buying up existing LP stakes in private equity or venture capital funds, providing liquidity to LPs who want to exit before the fund winds down. A continuation vehicle allows GPs to roll over portfolio company stakes from one vehicle to another, giving LPs the opportunity for an exit and enabling a GP to bring on new LPs.
Rising Asia
The liquidity crunch is a key driver of the growing secondaries activity. Initial public offerings tanked in 2021 and the slow rebound has prompted fund managers to look for other exit options to return capital to their investors.
GPCA’s report highlights eight continuation vehicle investments totalling $1.3 billion in the first half of 2025. All of the vehicles are focused on Asia, with the biggest being TPG’s fifth NewQuest Asia Fund that closed just shy of $1 billion in May this year, toward a goal of $1.5 billion.
“India is one of the few markets in Asia where we are seeing both a deepening pool of buyers and sellers,” said TPG NewQuest’s Mamtesh Sugla in the report. “The continued expansion of secondaries, particularly GP-led deals, is a sign of market maturity.”
“The motivation here isn’t about end of fund life, it’s about GPs identifying high-quality assets where they see the potential to generate more alpha by holding longer,” she added.
Mumbai-based 360 ONE Asset Management exceeded the target for its first continuation vehicle, raising $590 million. It is looking to make 20 investments of $18 million to $30 million.
The growth of emerging market secondaries aligns with broader global trends. French private equity firm Ardian secured a monstrous $30 billion for its secondaries fund from more than 460 investors, including institutional investors, sovereign wealth funds and high-net-worth individuals. That fund primarily invests in advanced economies. Blackstone and Lexington Partners each have raised more than $22 billion for their respective secondaries funds.
Last year, the Octobre Liquidity Guarantee Facility was launched with support from the European Commission to provide liquidity to impact funds. The fund commits to buying out stakes of impatient investors at any time, in less than 10 business days.
“Octobre is a way to mobilize private capital for impact at very large scale,” Octobre’s Sylvain Goupille told ImpactAlpha in a video interview.
Seeding markets deal by deal
Asia accounts for two-thirds of secondaries deal volume in emerging markets, with the largest deals spread across India, Japan and China.
One of the top deals last year: British International Investment’s sale of its stake in Aavishkaar’s second Goodwell India Microfinance Fund, to Switzerland-based Blue Earth Capital. The deal was the first for BII’s new strategy to help itself and other investors exit emerging market impact funds.
DFIs and other investors are increasingly exploring LP-led secondary solutions in regions such as Africa. BII’s sale also included Novastar Ventures Africa Fund II, which invests in companies that improve access to essential goods and services, and Adenia Capital Fund IV, which invests in African renewable energy, agriculture and other sectors.
In February, Synergy Private Equity Fund, which invests in growing small- and mid-sized businesses in Nigeria and Ghana, sold an LP stake to Sango Capital.
“As a DFI, building a secondaries market can help to nurture the PE ecosystem,” said BII’s John Owers. Secondaries, he added, “can play a mobilization role, increasing flows to undercapitalized markets from non-DFI commercial investors by removing blind-pool risk.” BII will look to do additional “mobilization secondaries.”
Similarly, a secondaries market is also beginning to take root in Latin America.
“We have observed a growing number of local GPs across Latin America exploring liquidity alternatives, such as CVs and strip sales, indicating the increasing sophistication of the region’s private capital ecosystem,” said Lexington Partners’ Juan Savino. He said high quality assets are attracting global investors looking for exposure to the region.
