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We're nearing the peak of private equity's love-affair with continuation vehicles, says Devon Park founder Jonathan Costello.

Driving the news: Earlier this month, the boutique bank Perella Weinberg acquired the secondaries advisory firm, jumping in on a market that's expected to top $210 billion by next year, according to Jefferies.

This interview has been lightly edited for length and clarity.

You've been working in the secondaries space for over 20 years. Now, PE firms are chomping at the bit to play in the space. What's happening?

"[PE has] been in and around the sectors, right? So their due diligence is more efficient. They have a better sense of valuation at a fundamental level. 

They're able to quickly decide whether they want to do a deal or not, and they're willing to write a larger check."

If they're writing larger checks, what are the second-order effects?

"Those investors attract more capital to the deal, which allows the capital raise for larger transactions to happen more efficiently, particularly in a single asset deal.

Now, the counterargument is that not every sponsor wants to have someone they'd view as a competitor in the deal. That's not universally accepted today by all sponsors — that they'd want to have one of the buyout-affiliated groups lead their deal. It kind of depends on your prior experience with them.

Clients have said 'That's awesome. Except, I prefer you to find capital elsewhere.'"

Are there any conflicts of interest at play?

"The view is, potentially, it takes a buyer out of the equation for the ultimate exit. Or, it chills others' interest in that business when they go to sell it, because another group has a pole position.

I think a lot of people are getting comfortable with it because it doesn't mean you [can't run] a traditional process.

There's no reason to think that there couldn't be a better bid, particularly if there are strategic bids in the market."

Is the concern around pole position theoretical or legitimate?

What's a misconception about secondaries?

"It's a big leap of faith for some of these firms to delegate the management of these businesses.

For traditional secondary managers, it's always been that way — manager first, asset a close second. It's flipped with these new entrants. They're willing to do deals with managers that they may not have done business with."

Nearly 20% of exits today are continuation funds. What's the peak?

"I think it could be 25% of the market and live between 10-25%.

They're for your best assets, right? And so if you have a 10-asset or 12-asset portfolio, there could be one or two companies within your fund that would check all the boxes to do a continuation fund."

"There's huge growth vectors still in sub-sectors like real estate and private credit. I don't see any near-term slowdown there.

The evergreen fund structures need to be fed. They take in capital, and it sits on the balance sheet as cash. They need to deploy those funds, that's going to drive kind of more deal flow."

Devon Park's Jonathan Costello on where secondaries grow next

We're nearing the peak of private equity's love affair with continuation vehicles, he says.

Photo illustration of Devon Park's Jonathan Costello surrounded by abstract price bars and circles. 

Photo illustration: Axios Visuals. Photo: Courtesy of Devon Park 

We&#x27;re nearing the peak of private equity&#x27;s love-affair with continuation vehicles, says Devon Park founder Jonathan Costello.Driving the news: Earlier this month, the boutique bank Perella Weinberg <a class="gtmContentClick" data-vars-link-text="acquired" data-vars-click-url="https://www.axios.com/pro/merger-deals/2025/08/01/perella-weinberg-devon-park-secondaries" data-vars-content-id="62b67e23-690c-4ea0-97dc-fac191d843ca" data-vars-headline="Devon Park&#x27;s Jonathan Costello on where secondaries grow next" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/merger-deals/2025/08/01/perella-weinberg-devon-park-secondaries" target="_self">acquired</a> the secondaries advisory firm, jumping in on a market that&#x27;s expected to top $210 billion by next year, according to Jefferies.

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Devon Park's Jonathan Costello on where secondaries grow next

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