Private Equity’s Rise in GP-Stakes, Continuations & Secondaries Amid Exit Pressures

Private equity firms are under increasing financial pressure due to a confluence of adverse market dynamics—primarily falling exit activity, rising expectations from limited partners (LPs) for GP commitments, and stagnating distributions. These conditions are pushing a growing number of managers to explore minority stake sales in their own firms (GP‐stakes) as a strategic lever to raise capital without fully divesting or relinquishing control.

According to data through October 2025, GP‐stake deal volume already totals $3.5 billion—very nearly breaking the previous high mark from 2015. Key buyers include heavyweight firms like Blue Owl, Blackstone, Hunter Point Capital, and Goldman Sachs’ Petershill Partners. However, this buyer base remains selective; firms with top quartile performance, strong brand, and growth prospects are significantly more likely to command investor interest for GP‐stakes, while middle‐tier firms face higher hurdles in securing favorable terms—or securing investor appetite at all.

The secondary market writ large has also reached new heights. LP‐led secondary volumes are estimated at ~$87 billion in 2024, while GP‐led secondaries accounted for $47 billion in just the first half of 2025. Continuation vehicles (CVs) are rapidly becoming a mainstream exit route—not a niche or fallback—as firms use CVs to roll forward high‐performing assets when traditional exits are unattractive or unavailable.

Stake sales and other liquidity tools (including GP stakes, continuation vehicles, fund financing) present trade‐offs: firms raise needed capital, manage partner liquidity, meet GP commitment demands, and lengthen holding periods. But these solutions also dilute control, reduce future fee and carry income, require enhanced governance/operational transparency, and may constrain strategic flexibility. The strategic risk for buyers in the GP‐stake market is uneven supply vs demand: as 77% of firms plan sales, it’s uncertain whether there is enough capital from quality buyers to meet that volume. Mid‐performing firms may struggle to achieve favorable terms or find buyers at all—market may bifurcate.

Over the next 1-2 years, watch for escalating use of GP‐stakes among large, established PE managers; acceleration in secondary market innovations and deal structures; potential volatility in valuation discounts as bid/ask spreads narrow; and increasing differentiation based on performance; smaller or mid-market managers may increasingly seek alternative funding or exit routes (e.g., fund financing, hybrid GP-stake + continuation). Open questions include the sustainability of GP stake valuations, implications for alignment between GPs and LPs under shared ownership, and regulatory or tax developments that could influence these deals.