In a sign of continued strength in the private credit market, Eurazeo and Pantheon have successfully closed a $567 million credit continuation fund. The fund will facilitate the transfer of assets from prior Eurazeo private credit vehicles into a new structure. This allows existing investors to exit while providing fresh capital for European mid-market deals.

This move comes as secondary deals in private assets hit record levels, reaching $226 billion last year. The rise of continuation funds reflects a broader trend of increased activity within the $1.7 trillion private credit market. Eurazeo's Nicolas Nedelec highlighted the fund's tailored solution for LPs and partnership with Pantheon.

Pantheon's involvement, coupled with its backing of Crescent Capital's $3.2 billion fund, underscores strong institutional interest in credit secondaries. Both Eurazeo, managing €37.4 billion, and Pantheon, overseeing $82 billion, are well-positioned to capitalize on the continued growth in secondary-led private credit solutions.

This trend is driven by slower dealmaking and limited refinancing options, which have constrained exits for private credit managers. As the market evolves, expect more of these types of deals, which provide liquidity and fresh capital simultaneously. This structure is becoming a standard tool in the private equity world.