GP Funds and CIVs Rewrite the Exit Playbook

India's private-markets liquidity profile has shifted from a one-way pipeline of IPOs and strategic M&A toward a multi-layered "liquidity stack." GP-led transactions, mainly continuation funds, have surged globally, with industry figures noting GP-led volumes hit roughly USD 70 billion in 2024, which is approximately a 31 per cent YoY rise.

- BY PRINCE KARIAPPA

The continuation vehicles make up close to 85 per cent of GP-led activity, signalling that managers are increasingly using structured secondaries to extend hold periods while delivering liquidity to early investors, according to Indian Venture and Alternate Capital Association (IVCA) data. Ashish Fafadia, Partner, Blume Ventures, said at a recent IVCA Secondaries conference that secondaries have become a very important source of DPI generation for the alternatives industry as a whole, not only in India, but also globally.

"Of late, it has also been emerging as a very useful asset class within AIFS and alternatives as a category for Indian family offices, institutional investors, and ultra-HNIS alike. We have had the chance to raise secondaries and continuity funds for Blume over the last five years, and we look forward to sharing some of these experiences," said Fafadia.

Regulatory changes are now formalising co-investment structures that feed this stack. SEBI’s May consultation and its June board decisions opened the door for co-investment vehicles (CIVs) to be launched as separate AIF schemes, relaxing several operational constraints and clarifying disclosure and governance requirements for Category I/II AIF co-investments, steps that lower frictions for LPs and enable GPs to syndicate follow-on or secondary positions within a regulated framework.

Real deals show the mechanics at work, with India-focused private equity firm LGT Capital Partners and Multiples Alternate Asset Management closing a USD 430 million continuation vehicle in 2025 to retain three portfolio companies while providing liquidity to Fund II investors, an example of how large continuation vehicles recycle capital and concentrate long-term upside with new backers.