The GP stakes industry faces significant challenges achieving ultimate exits despite being highly cash generative. As approximately $100 billion in GP stakes funds approach end of life, market participants increasingly explore liquidity tools including continuation vehicles. Blue Owl Capital recently launched a CV transaction for its $5.3 billion perpetual capital fund, moving a 5% strip of positions into a new entity.

Continuation vehicles offer diversification benefits but face structural challenges with traditional secondaries buyers. Most secondaries firms invest from closed-end, 8-10 year vehicles, creating duration mismatches with long-term GP stakes funds. Dedicated GP stakes secondaries players are emerging, along with interest from long-horizon institutional investors like insurance companies and pension plans.

GP stakes firms can also provide liquidity through GP-led secondaries, NAV finance, or preferred equity solutions. These approaches maintain the same underlying investors, avoiding complex restructuring. However, GPs remain sensitive about information sharing due to potential competitive conflicts among LPs in secondaries funds.