News and Analysis
To be continued? Private credit tests the waters with continuation funds
- Jemima Denham
- +Synne Johnsson
•8 min read
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When private credit behemoth BlackRock set the wheels in motion for a $1.3bn private credit continuation fund in November, it signalled increased efforts by asset managers to lock in longer hold periods for private credit assets. However, it also raised questions around the incentive for such a vehicle.
BlackRock’s continuation fund is the biggest of its kind. It will consist of 300 first lien loans moving to a new fund, which is being arranged by Jefferies, as first reported by Bloomberg.
The opportunity in private credit secondaries can take different forms, such as an LP-led transaction (where an investor offloads a position in the secondary market), or a GP-led transaction resulting in the transfer of an asset into a continuation fund.
