Continuation Funds Explained: Why PE Sells Companies to Itself

Why would a private equity firm sell a company to itself? In 2025 Vista did exactly that, moving Cloud Software Group into a new $5.6 billion fund it also runs. This video explains continuation funds in plain English. It covers why funds run out of time, how a manager sells its best company from an old fund into a new one, and the choice every investor then faces: take the cash now, or stay put. It also covers how the manager's carry and fees reset, why the manager sits on both sides of the deal, and the three checks on the price: an auction, a fairness opinion and the investor committee. A second real deal shows how it works in practice: Cerberus and SubCom, led by CVC. Time Index: 00:00 Vista sells a $5.6 billion company to itself 00:21 Continuation funds, explained 00:31 The clock runs out 01:18 The fix: a continuation fund 02:02 Vista isn't alone: Cerberus and SubCom 02:34 One example: sell or stay put 03:46 Why managers like it: the clock resets 04:59 The big problem: both sides of the deal 05:27 Testing the price 06:24 Feeling pushed: three questions to ask 06:57 Recap Read more: Carried interest in plain English: https://us-taxdesk.com/glossary/carri... What a private equity fund is: https://us-taxdesk.com/glossary/priva... Watch next in Inside the Fund: The Hidden Liquidity Crunch Freezing Wall Street    • The Hidden Liquidity Crunch Freezing Wall ...   Start with how these funds work: Private Equity Explained    • Private Equity Explained: How $40 Becomes $70   Playlist: Inside the Fund    • Inside the Fund   Sources: Bloomberg, "Vista Raises $5.6 Billion for Cloud Software Continuation Fund", 25 June 2025, and Private Equity Wire, 26 June 2025 ($5.6bn; moved at about 5% below its Q1 2024 value) CVC, "Cerberus closes $2.3 billion single-asset continuation vehicle for SubCom", 20 April 2026 Jefferies, Global Secondary Market Review FY2025, 10 February 2026 (GP-led deals of $115bn in 2025) ILPA, Continuation Funds: Considerations for Limited Partners and General Partners, May 2023 Kirkland & Ellis, "Guidance Meets the Market: A Practical Look at ILPA's 2026 Draft CV Guidance", 30 September 2026 TrophyCo and its numbers are an illustrative example, not a real company or fund. Free glossary, plain-English explainers and in-depth articles on US fund tax: https://us-taxdesk.com Get new explainers by email: subscribe at https://us-taxdesk.com Subscribe to US Tax Desk:    / @us-taxdesk   Music: The Devil's Defiance by Ritchie Everett (Epidemic Sound) General information, not tax or investment advice. #ContinuationFund #PrivateEquity #InsideTheFund