--- title: Continuation Funds Outlook - 2025 description: Continuation funds are gaining traction as PE firms seek alternatives amid market uncertainties in 2025, presenting both opportunities and challenges for maximizing investor returns. image: https://blog.stpis.com/hubfs/shutterstock_2491646017-1024x560.jpg --- [![STP\_header\_logo](https://blog.stpis.com/hs-fs/hubfs/STP%20Growth%20Child/STP_header_logo.png?width=75&height=94&name=STP_header_logo.png "STP_header_logo")](http://stpis.com) - [FAQs](https://stpis.com/faqs-fund-administration-compliance-managed-services/) - [About](https://stpis.com/about/) - [About STP](https://stpis.com/about/) - [History](https://stpis.com/history/) - [Team](https://stpis.com/people/) - [STP Careers](https://stpis.com/careers/) - [STP Culture](https://stpis.com/careers/culture/) - [Benefits](https://stpis.com/careers/benefits/) - [Diversite, Equity, Inclusion & Belonging (DEIB)](https://stpis.com/careers/deib/) - [Hiring Process](https://stpis.com/careers/hiring-process/) [Portal Login](https://portal.stpis.com/) [Connect With Us](https://stpis.com/connect-with-us/) - [Who We Serve](https://stpis.com/who-we-serve/) - [Institutional Managers Investment operations services and innovative software for the front, middle, and back office.](https://stpis.com/who-we-serve/institutional-managers/) - [Wealth Managers Custom and turnkey asset management programs to grow assets and support clients.](https://stpis.com/who-we-serve/wealth-managers/) - [Emerging Managers Best-in-class full service solution to springboard your startup to the next level.](https://stpis.com/who-we-serve/emerging-managers/) - [Private Fund Advisors Comprehensive suite of fund administration, compliance, account and investor reporting services](https://stpis.com/who-we-serve/private-fund-advisors/) - [What We Do](https://stpis.com/services/) - [Investment Operations Outsourcing End-to-end investment operations and trading services.](https://stpis.com/services/investment-operations-outsourcing/) - [Fund Services Complete suite of services that deliver best-in-class fund administration.](https://stpis.com/services/fund-administration-services/) - [Compliance Services Get oversight that keeps you compliant and ready for changing regulatory requirements.](https://stpis.com/services/compliance/) - [Managed Services Designed to reduce operational burden, streamline workflows, and help you scale without adding headcount.](https://stpis.com/services/managed-services/) - [Trade Settlements Streamline processes, increase efficiency, and mitigate risk with post-trade settlement services.](https://stpis.com/services/trade-settlements/) - [Reconciliation Services Automate reconciliation tasks and strengthen oversight with reconciliation dashboards.](https://stpis.com/services/reconciliation/) - [BluePrint](https://stpis.com/blueprint/) - [Why STP](https://stpis.com/why-stp/) - [STP Knowledge Hub](https://stpis.com/stp-knowledge-hub/) - [Perspectives Fresh, original STP content written by members of our team, covering a broad range of topics.](https://blog.stpis.com/blog) - [STP in the News Our take on industry articles and topics written by our colleagues across the financial services space.](https://stpis.com/stp-knowledge-hub/in-the-news/) - [Case Studies Explore real-world success stories that highlight how we've helped clients overcome challenges, drive growth, and achieve their goals.](https://stpis.com/stp-knowledge-hub/case-studies/) - [Strategic Insights Stay ahead of regulatory changes, operational challenges, and industry shifts. Download our strategic insights to equip your firm with expert guidance on compliance, operations, and growth strategies.](https://stpis.com/stp-knowledge-hub/strategic-insights/) Apr 2025 # Continuation Funds Outlook - 2025 ![Picture of STP Perspectives](https://blog.stpis.com/hs-fs/hubfs/STP_Logo_Color_Tag-2.png?width=50&name=STP_Logo_Color_Tag-2.png) [STP Perspectives](https://blog.stpis.com/blog/author/stp-perspectives) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://blog.stpis.com/blog/continuation-funds-outlook-2025) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://blog.stpis.com/blog/continuation-funds-outlook-2025) [Twitter icon](https://twitter.com/intent/tweet?url=https://blog.stpis.com/blog/continuation-funds-outlook-2025) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://blog.stpis.com/blog/continuation-funds-outlook-2025) [envelope icon](mailto:?body=https://blog.stpis.com/blog/continuation-funds-outlook-2025) Continuation Funds Outlook - 2025 3:06   It wasn’t long ago that continuation funds (a fund set up by a private equity (PE) firm to acquire assets from an existing fund) were considered a niche solution in private equity—but that’s no longer the case. In recent years, they’ve moved firmly into the mainstream as more PE firms look for creative ways to hold onto prized assets and navigate tricky exit environments. It’s difficult to tell exactly how many such vehicles were set up in 2024; however, estimates are between 100 and 200, representing billions of dollars in transactions. While past statistics are important, what is the outlook for 2025?   If the first three months of the year are any indication, uncertainty remains the only constant. Wild swings in the stock markets, geopolitical instability, inflation pressures, and simmering global trade tensions are proving to be very challenging for both public and private markets. A recent estimate states that there may be as few as 150 IPOs this year, clocking a fourth consecutive year of declines, proving how market turmoil is hitting both the private and public markets. For PE firms, that’s a strong signal: Continuation funds may be poised for yet another breakout year. Although just one way for a PE firm to exit a holding, the decline of IPOs highlights what could be yet another banner year for the establishment of continuation funds. Rather than risk tricky market conditions, many firms may opt to move valuable assets into continuation vehicles, effectively buying more time in the hope of achieving stronger returns down the line. With changing market conditions come changing valuations. A valuation that may have looked attractive in 2024 might feel underwhelming in 2025. Rather than forcing an exit, a holding firm may choose to hold on a little longer and move the asset to a continuation fund as a “wait and see” strategy to extract as much value as possible for them and their investors. Still, continuation funds can present many operational and reputational concerns: - **Investor appetite:** What is investor appetite to commit capital to yet another illiquid deal that could take years to recoup and could potentially lose value in the long run? - **Complexity and cost:** Adding another legal structure in the mix comes with legal costs, operational issues, and accounting/audit requirements. - **Valuation questions:** How does one properly value an asset that is moving from one fund to another? Third-party involvement is often needed, but valuations can be subjective and sensitive to market swings. When all is said and done, PE firms have a fiduciary duty to maximize returns for their investors. Exiting at the right time is a decision that PE firms can struggle with, and the use of a continuation fund is just one of several tools in a PE firm’s toolbelt. My guess, however, is that we will hear more about them over the course of 2025 than in years past if current conditions persist.   [![fund admin cta](https://no-cache.hubspot.com/cta/default/20095280/interactive-172834896387.png)](https://blog.stpis.com/hs/cta/wi/redirect?encryptedPayload=AVxigLIPSwZDjtSmDHNTLtkU5Fv5dXf0DfmjIgc%2BvnwBq5AyVF7DBnhrfxZAcZOOjLsDCAnsAC1OSIBsMlxFDifK7f09ZQI008ZPEM9pCxIDw%2BP9SjDaQNAAU6WCj1WFzkO%2Be%2B5ZUwGC%2BaAMUkY73oeQ3Q2j65Kfx%2Bfs%2FdMu9Gjx25oa5xGX5H2jsA35VzPFvEke3wMb9Ddhy5b4rWzq8EqnatVt1EWtcJH32Dmv4OCZcz8wyiaXLatQOJbNQuaJvKf3RZD6S3aRSzVLEqUQSlt%2BvxKc%2BoAioscgpgV3KpzxbQ%3D%3D&webInteractiveContentId=172834896387&portalId=20095280) ## Related posts [![SEC Updates Its Enforcement Manual](https://blog.stpis.com/hs-fs/hubfs/SEC.jpg?height=200&name=SEC.jpg)](https://blog.stpis.com/blog/sec-updates-its-enforcement-manual-what-it-means-for-advisers-and-market-participants) [Compliance](https://blog.stpis.com/blog/tag/compliance) ## [SEC Updates Its Enforcement Manual: What It Means for Advisers and Market Participants](https://blog.stpis.com/blog/sec-updates-its-enforcement-manual-what-it-means-for-advisers-and-market-participants) ![Picture of STP Perspectives](https://blog.stpis.com/hs-fs/hubfs/STP_Logo_Color_Tag-2.png?width=50&name=STP_Logo_Color_Tag-2.png) [STP Perspectives](https://blog.stpis.com/blog/author/stp-perspectives) Feb 2026 On February 24, 2026, the SEC’s Division of Enforcement announced significant updates to its... 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