Trilantic’s Bold Continuation Fund: Risks, Rewards & the New GP-Led Normal

Trilantic’s strategy reflects a growing trend among mid-market private equity firms to use GP-led continuation mechanisms as a liquidity and value-creation tool, especially when raising new flagship capital becomes difficult. By proposing to transfer most remaining Fund VI assets into a continuation vehicle, Trilantic is aiming to reset its investment horizon while providing LP liquidity options and funding add-ons or new investments via fresh capital. This move could set a precedent in scale for mid-market CVs. [1]

However, significant risks and trade-offs are involved. Fund VII’s under-raise suggests market skepticism, particularly around asset quality or firm stability, challenging expectations for high valuation placement. Continuation deals require strong GP alignment and LP trust; issues such as senior departures and lack of recent fundraising success make it harder to secure favorable terms. [1]

Valuation terms will be key. One related report indicates a ~30% discount in negotiations around one continuation vehicle for Trilantic’s assets, though final terms are still in flux. Deep discounts can hurt existing LPs rolling interests, making LP participation dependent on perception of fairness, governance, and future prospects. [2]

Strategically, if Trilantic executes this continuation fund successfully, it could model a path for mid-market GPs facing a constrained exit environment and waning fundraising power. Given that GP-led transaction volume is rising—nearly half of all secondary market volume in 2024—such a high-profile deal in the ~$2–3B range would reaffirm continuation vehicles as a mainstream private equity lifecycle tool. [3][6]

Open questions include: how large will the fresh capital portion be, how steep a discount will be offered, what governance rights and carry reset might be negotiated, and whether LPs and buyers demand enhanced structures to offset lower fundraising confidence elsewhere in the firm. Also, whether Trilantic can retain key senior talent will materially affect perception and execution of the continuation vehicle. [1]