Place : Sophia Antipolis Campus (Grande Riviera room) 
Time : 10:30AM-12:00PM

Speaker : Ludo Phalippou (Saïd Business School University of Oxford) 

Abstract : We develop a theory of private equity continuation vehicles (CVs), a rapidly growing exit route in which general partners (GPs) transfer portfolio companies from an existing fund to a newly created fund they manage. CVs can enhance efficiency by extending the holding period of high-potential firms, but they also allow GPs to extract rents by exploiting information advantages and their intermediary role between legacy and new limited partners (LPs). Our model shows how these frictions give rise to inefficient CVs, which either continue failed firms, or retain already successful firms. We characterize the optimal fund contracts that limit such distortions and highlight how GP and LP coinvestment shape outcomes. The analysis generates predictions for when CVs arise, the quality of assets they contain, and their distributional consequences across investor groups, offering guidance for contract design and for evaluating the welfare effects of GP-led secondaries.