In recent years, continuation funds have become a third route for private equity buy-out funds to exit their investments, especially when traditional M&A or IPO exits are not feasible or desirable. These funds allow sponsors to extend their holding period for assets with significant future value creation opportunities. Consequently, it seems likely that continuation funds will become a more common exit option for sponsors.

In the article available at the link below, May Smith and Emily Szasz, partners in our London tax team, discuss the tax consequences of continuation fund transactions from an investor and fund manager perspective, as well as at an asset level.

This article was originally published in Tax Journal on 6 December 2024.