Tensions are mounting between limited partners and general partners over continuation funds, with LPs increasingly questioning whether these vehicles truly serve their interests. According to Jennifer Choi, chief executive of the Institutional Limited Partners Association, ILPA members report growing frustration with how continuation vehicles are being deployed as default liquidity solutions rather than deliberate options.

A recent ILPA survey reveals that only 21 percent of LPs view continuation funds as their preferred path to liquidity over the next year, far behind conventional exits at 58 percent. The data shows CV exits jumped to nearly 20 percent of all transactions in 2025, up more than 50 percent from the previous year. LPs complain that many continuation deals lack transparency around bidding processes and often feature economically unfavorable terms like premium carry structures.

ILPA has responded by releasing new disclosure templates to standardize information flow during continuation transactions. The association emphasizes that early LPAC engagement, true status quo options, and genuine price-discovery processes are essential for maintaining trust. With regulatory scrutiny likely to intensify and retail investors increasingly entering private markets, how GPs and LPs navigate these challenges will define the future of private equity partnerships.