OCIOs turn GP-led secondaries into a deployment play

Outsourced chief investment officers have found a use for the continuation vehicle that its early architects never advertised: deployment. Endowments and foundations that hand their asset allocation to OCIOs are increasingly treating GP-led secondaries as the fastest route into private markets, prioritizing performance opportunities over liquidity concerns, according to Secondaries Investor, and in doing so they are handing the GP the pricing power that a competitive auction would have checked. That framing inverts the traditional pitch of a continuation vehicle, which has always been sold as an exit for the GP and an extended holding period for the LP. In the OCIO's hands, it becomes an entry.

The shift has a signature deal: Providence Equity Partners has closed a continuation vehicle for 365 Retail Markets, the company it acquired nearly six years ago, at more than $1 billion, Secondaries Investor has learned, a transaction that shows the GP going back to its own limited partners for a second act rather than testing the asset on the open market. The appeal to OCIOs is plain: a large check into a single, known company, deployed without waiting for a fund to assemble a portfolio.

The money is following: Montana Capital Partners has secured $1.7 billion for its infrastructure secondaries programme, and founder and CEO Antoine Prudent says the firm is looking to boost infrastructure exposure while eyeing private equity and real estate secondaries as well, according to Secondaries Investor, a raise that adds to the dry powder for a strategy that a few years ago was a niche inside a niche. As the pool grows, so does the pressure to find deals that can absorb it.

Part of the appeal is control: co-investments and single-asset CVs offer investors 'greater control', partner Zach Jackson told Secondaries Investor, which is why an OCIO might prefer a direct stake in a single asset to a blind pool. But control is a two-sided concept: the same investor who gains control over a specific asset loses the discipline of a competitive auction, because the GP is setting the terms.

Continuation vehicles present an interesting opportunity for fund finance, but concentration risk and a reluctant investor base pose a challenge, Secondaries Investor notes. The reluctance is real among traditional LPs — the tail-end investors asked to roll or cash out — yet the OCIO wave may be diluting it, replacing it with a performance-hungry cohort that sees a CV as a faster way to put money to work.

The market is already adjusting: Lazard's Kevan Comstock says new entrants are seeking to pre-empt auction processes to 'differentiate themselves', cutting out the competitive step entirely by approaching the GP directly with a bid that never hits the open market. One 2026 Next Gen Leader predicts the GP-led market will become 'indistinguishable' from the sponsor-to-sponsor market over the next five years, as PE firms use CVs to gain access to companies they want to own.

That prediction is less a forecast than a description of what is already happening: when the buyer base is dominated by OCIOs who need to deploy and are willing to underwrite the manager's mark, the GP-led market stops pricing risk and starts pricing relationships. As this publication has argued, GP-led continuation vehicles have crossed from accommodation to core exit, and the OCIO funding wave makes that possible and also makes it dangerous, because when the buyer's mandate is deployment speed, the price is the manager's to set. LPs who roll by default are underwriting that price; the Providence deal is one data point, and it will not be the last.