What Holds #2 – Extending value, or avoiding the question
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As exits become less predictable in private equity, value is still being realised, just not in the way you’d expect.

We’re seeing record levels of secondary transactions and continuation vehicles, well over $200bn across recent transactions, allowing firms to generate liquidity without fully exiting portfolio companies.

On one level, this makes sense. It provides flexibility, gives investors options, and keeps deals moving in a more constrained market.

But it also changes the nature of the question. Because if value can be realised without a true external exit, what exactly is being proven – the business itself, or the financial structure around it?

Much of this is now being sustained by the rapid growth of private credit financing companies to continue operating under pressure. Combined, these mechanisms buy time. But time spent managing tension is not the same as time spent resolving it. And that distinction matters.

These mechanisms are often described as solutions to a timing problem. And sometimes they are. 

But at this scale, they also start to look like a way of extending the life of an investment without fully resolving whether the company is ready to stand on its own.

If a business is truly solid – structurally, operationally, and culturally – it should be able to transition cleanly beyond its current ownership. If it isn't, then time doesn't necessarily increase value. It can just as easily expose where that value hasn't fully formed yet.

In that context, liquidity becomes a way of managing the situation, rather than confirming it.

Is what we're seeing not just market friction, but a deeper tension between how value is being created and how it is being realised?

Perhaps both.

And the longer the holding period extends, the less clear it becomes what is actually holding – the company, or the structure around it.

Because ultimately, the more a company is built to hold, the less it needs the system to hold it together.
 


Joanna Stone works with PE firms and portfolio companies on the human architecture of change. 



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