GP-led continuation vehicle volume hit $100 billion for the first time in 2025, but explosive growth has exposed significant friction points with limited partners. While CVs have become vital liquidity tools in a constrained exit market, many LPs report frustration with truncated timelines, opaque valuations, and diluted alignment of interest. Some investors have even faced losses when CV-backed companies later filed for bankruptcy.

Valuation transparency remains the biggest sticking point. LPs complain that single-bidder pricing and fairness opinions without market testing create conflicts when GPs effectively sit on both sides of deals. Industry experts say gold-standard processes now include M&A-style auctions with multiple bidders, data rooms, and management access. Some GPs are adapting, with more sophisticated auction processes becoming the baseline rather than a differentiator.

Process timelines and status quo options present additional challenges. Only 16 percent of LPs feel they receive adequate time to evaluate CV proposals, while almost three-quarters report never seeing true status quo provisions that maintain existing economics and governance. Industry leaders emphasize that GPs must explore alternatives like minority recaps before pursuing CVs, as the structure's inherent conflicts make genuine alignment difficult to achieve. The market's maturation depends on whether GPs can address these fundamental LP concerns.