General Atlantic inks fifth-largest continuation vehicle of all time

Ardian and HarbourVest Partners led the process that also involved anchor investments from CPP Investments and Partners Group.

Global growth equity firm General Atlantic has closed its first-ever continuation vehicle, the fifth largest by deal value of all time.

The Continuation Fund, as it is called, closed more than $3 billion of new commitments to bring four assets from separate pools, including the evergreen fund, into a new vehicle. Up to $1 billion of that capital will be available as follow-on investment to support continued growth, according to a statement.

“With our first-ever multi-asset Continuation Fund, we are able to support the long-term trajectories of some of our most exciting growth stories while also providing optionality to our existing investors,” said Bill Ford, chairman and chief executive of General Atlantic.

Ardian and HarbourVest Partners led the processes, as affiliate title Buyouts reported in May, and was anchored by commitments from CPP Investments and Partners Group.

General Atlantic is “broadly retaining” its stakes in the assets, according to the release.

The fund represents the “largest pool of new money secondary commitments” in a continuation fund to date, according to a spokesman for General Atlantic. By size of continuation vehicle, it ranks as the fifth-largest, according to Secondaries Investor calculations.

The assets in question include Argus Media, Red Ventures, Sanfer and Howden Group Holdings (previously Hyperion Insurance Group), all of which described as “exceptionally strong” by Ardian US co-head Vladimir Colas.

Ardian’s participation comes as another deal it was understood to be backing, run by New Mountain Capital, did not go ahead after the largest asset in the process was picked off by external buyer Panasonic. Ardian and New Mountain decided to end the deal in April once the asset, supply chain software provider Blue Yonder, which represented around half of the deal’s total value, was no longer included, Buyouts reported.

Large deals have proceeded through the secondaries market at a brisk pace since the second half of last year. Along with GA and New Mountain, other big deals include Leonard Green, which moved assets out of its 2007 fund and into a continuation pool in April; and Kohlberg & Co, which is understood to be running a process in its 2011–vintage fund.

Overall, total secondaries deal volume last year was estimated around $60 billion, versus a record high of $80 billion in 2019, according to Evercore‘s full-year volume report. GP-led deals represented about 53 percent of the total deal volume last year, or around $32 billion, Evercore estimated.

Secondaries could split into a two-speed market, according to Cebile Capital founder and head Sunaina Sinha, with GP-led transactions able to stand on their own with robust volume, and LP stake sales on the other side. The two types of transactions have different duration and risk, and it makes sense to treat them in their own right, Sinha told Secondaries Investor.

Evercore and Paul Weiss advised on GA’s transaction.

– Chris Witkowsky contributed to this report.