Value of ‘continuation fund’ deals soars 180% since 2019 as competition for new targets threatens to curb returns
Private equity groups this year struck $42bn worth of deals in which they sold portfolio companies to their own funds, a sharp increase over 2020 in a once-niche type of transaction that can generate handsome payouts to executives.
This year’s $42bn deal total, calculated by Raymond James’ Cebile Capital unit, is a 180 per cent increase on the 2019 level, and 55 per cent above 2020. The figure represents the value of the stakes sold, plus any additional capital raised to inject into the companies.
US buyout group Clayton, Dubilier & Rice struck one of the year’s largest continuation fund deals this month when it sold part of its stake in Belron, a car windscreen repair company, to its own newer $4bn fund in a deal that valued the business at €21bn.
General Atlantic sold four of its existing portfolio companies — insurance group Howden, Mexican pharmaceutical group Sanfer, media company Red Ventures and price index provider Argus Media — to its own $3bn continuation fund in July.
Read more/Source: Financial Times
