Continuation vehicles now perform on par with buyout funds and occasionally outperform them, a shift that matters for any operator managing a company toward exit. Morgan Stanley’s review of 2018 to 2024 vintages puts continuation funds at a median 1.4x MOIC against 1.3x for buyouts, with tighter dispersion, summarized by HarbourVest.
The return profile is not the constraint. The constraint is eligibility. GPs speaking at SuperReturn US West said maybe 1.5 out of 10 portfolio companies can carry a CV, because a CV is underwritten like a company rather than a fund. The buyer needs a standalone equity story, a management team that stays, and data that survives diligence.
Most portcos fail on the third requirement. The information architecture was never built to separate their performance from the fund’s. A company can hit its EBITDA plan and deliver organic growth while remaining ineligible for a CV because the data room cannot answer basic questions about customer acquisition cost by channel, contract retention by cohort, or margin contribution by product line. The numbers exist somewhere, but not in a format a new buyer can audit.
CV-ready is now a higher grade of exit-ready, and most of the distance between the two is an information problem. The portco that tracks synergies from day one, locks baselines before close, and runs a weekly value dashboard is solving for the traditional exit and also building the data layer that makes a continuation vehicle possible.
For an operating partner, that means the tracking system you install early in the hold determines which exits you can run later. The cost of the system is a rounding error against the enterprise value at stake. Discovering late in the hold that you cannot package the company for a CV because the data was never structured for it is the difference between two paths to liquidity.
