If you have money in a pension fund, a state retirement system, or a university endowment, your savings may be tangled in one of Wall Street’s most contentious practices.
The Securities and Exchange Commission’s enforcement division has opened a probe into private equity continuation vehicles, which made up the majority of $106 billion in fund manager-led secondary deals last year, Reuters reported, citing three people familiar with the matter
How continuation vehicles let fund managers trade with themselves Traditional private equity funds operate on a roughly ten-year cycle, during which a firm buys companies, grows them, and sells them at a profit to return cash to investors. Continuation vehicles upend that model by allowing managers to transfer assets from a maturing fund into a new vehicle, bringing in fresh investors while giving existing backers the choice to cash out or stay in. The structural problem is that the fund manager is on both sides of the transaction, acting as seller for original investors and buyer for incoming ones, in assets where pricing is opaque and hard to verify independently.
That dual role creates incentives to inflate valuations, and it raises questions about whether buyers and sellers are receiving the same information, critics have warned. Manager-led secondary transactions, of which continuation vehicles make up the majority, totaled $106 billion in 2025, up from $70 billion the prior year, Evercore estimated. Major investors call continuation vehicles ‘indicative of rot’ Some of the country’s largest institutional investors have voiced sharp objections to the growing use of these structures, calling them a symptom of dysfunction in the private equity industry. “Continuation vehicles are indicative of rot in private equity,” Marcus Frampton, chief investment officer of the Alaska Permanent Fund Corporation, which manages $83 billion derived from the state’s oil revenues, told The New York Times.