According to a recent report, a substantial portion of Limited Partners (LPs) are prioritizing liquidity over rolling into continuation funds. This shift suggests a growing preference for accessing capital, potentially driven by economic uncertainties and a desire to rebalance portfolios. The trend could impact the private equity market.

This trend is reflected in Coller Capital’s investor survey, which found that nearly one-quarter of LPs have seen evidence of CV-on-CVs. This refers to the practice of selling existing fund interests to a continuation vehicle. This shows a growing demand for secondary market transactions.

The preference for liquidity may stem from a need to meet distribution targets or capitalize on new investment opportunities. LPs may also be seeking to reduce their exposure to private market assets. This could lead to increased deal flow in the secondary market.

Looking ahead, it's important to watch how this trend affects the pricing of secondary transactions and the overall fundraising environment for private equity firms. The increasing demand for liquidity could lead to increased downward pressure on asset valuations.