Major institutional investors including a sovereign wealth fund and one of the largest US public pension plans are voicing concerns that some private equity firms may be pushing through sweetheart deals where buyout groups sell assets to themselves through continuation vehicles. These specialized entities purchase companies from a manager's older funds, creating inherent conflicts when the same firm oversees both sides of the transaction.

The controversy intensified as continuation vehicle sales hit $100bn globally last year, roughly a fifth of all private equity exits, up from about $70bn in 2022 and just $7bn in 2015. Some multi-strategy firms run both traditional buyout funds and secondaries businesses that back continuation vehicles, raising questions about whether advisory committees fairly evaluate deals when members' employers stand to profit from the purchase side.

One investor described a recent incident where multiple members of a selling fund's advisory committee worked for institutions investing in the same continuation vehicle as bidders. "They were quasi-insiders," the investor said. Some pension plans now demand wider approval from fund backers and greater consultation before assets move into continuation vehicles, viewing such transactions as conflicted exits rather than legitimate investment tools.