Speaker 1Hi, I'm Bruno Alves, Editor-in-Chief of Infrastructure Investor, and welcome to the Infrastructure Investor podcast. Infrastructure continuation vehicles have come a long way from a niche technology with a somewhat spotty reputation to a key tool that is less about extending ownership for its sake and more about enabling the next phase of growth for the asset class. In today's episode, I sat down with America's editor, Zach Bentley, to discuss why GP Labs are now reshaping the infrastructure secondaries market, how LP attitudes towards continuation vehicles have shifted, and why high-growth digital infrastructure platforms are proving fertile ground for continuation vehicles. Hi, Zach. Welcome to the podcast. Hi, Bruno. Good to be here. So, we've been doing a lot of secondaries-focused content lately. I feel it's been a bit of a slow but steady buildup. We've been seeing secondaries fundraising increase steadily year by year to the point where it's now noticeable in our fundraising figures. We did a recent podcast with Andrea Ackberg, the head of infrastructure at Pantheon, where she made the case that secondaries are now reshaping the infrastructure. We're now really in infrastructure secondaries at that core part of LP allocations. And now we've also published a cover story, our latest from our September issue, which is focused on the growth of GP Labs secondaries and specifically the role of continuation vehicles in driving this market in infrastructure. And I just want to very quickly frame the debate using some data from podcasting. agent, Campbell Lutchens. So their total volume in the first half of the year of infrastructure secondaries totaled some 10 billion. And 78% of that came from GP-led transactions, mostly really continuation fund activity, which is quite something compared to the 55% of GP-leds driving transaction growth in 2025. Campbell Lutchens expects total volume of secondaries, infrastructure secondaries in 2026 to go up to 26 billion. And they are looking, they're showing from 2022 to now a 32% CAGR. So these are very, very chunky figures, all kind of speaking to the momentum behind this market. But Zach, let's go into this. So you've just. written our cover story, CVs are in the driving seat and in a very different position than they were a few years ago, right?
Speaker 2Yeah. I think what's really important to add to those statistics you just mentioned is for the first half of 2026, infrastructure GP-leds, according to Campbell Lutchens, accounted for 15% of the overall market. I mean, you were talking infrastructure specific numbers there. When we talk about the wider private markets area of all the GP-led deals, infrastructure was 15%. That's huge. Compared to H1 2025, that was 6%. So it's not only just becoming massive in infrastructure, infrastructure CVs are becoming massive in private markets. They were well ahead of any other asset class after buyouts.
Speaker 1Yeah. No, you're totally right. It's the way distribution has shifted completely. And so what has effectively changed? I mean, we all know that the sort of running joke CVs were the technology, to use a term from the secondaries folks, that was sort of used to sweep things under the carpet and keep the bad things going. But I feel this is almost like a myth that the secondaries players probably wince when they hear this. But you tell me, what have you found, Zach, when you were writing your story?
Speaker 2What has changed? Firstly, I mean, on a very basic level, what has changed is that the infrastructure asset class has got older. And so more funds are coming in. And so people are looking at different exit options. And a CV is one of those. We haven't had as many in the past, because back in 2010, 2012, there were only so many fund managers. So we're definitely getting that. And you can see that, say, with one of the CVs that we discussed in the cover story, iSquared's CV for Inkia, the Peruvian power platform, that's come from their fund one. You know, we think of iSquared as a very established, infrastructure fund manager these days. They're still realizing fund one. So that's part of it on a very basic level. And then the other part is you do have a much stronger suite of infrastructure secondary buyers. As you mentioned, there's been so much fundraising going on that the people that can see these platforms, these continuation vehicles, there's a wider suite of those funds to do so. And it's more in demand. And then thirdly, the thing that's really been taking off in the last 18 to 24 months is the data center aspect. Lots of data center platforms being rolled into continuation vehicles, whether in a large cap setting or more of a mid cap setting, as people just see so much more room for growth. And frankly, they have high performing platforms that they don't want to get rid of.
Speaker 1Yeah, lots of points to pick up here. I think your point about where we are in the asset classes is well made. I want to pick on something, which is also the, you know, another classic of this asset class, there was always a bit of a mismatch between the duration of the assets and the structures, the closed end, the traditional structures in which they were enclosed. And if you have good assets in whichever sector, this could be like a nail fitting suit. How much of that have you found is driving this CV boom in infrastructure? So a resolution also to this mismatch, this duration mismatch?
Speaker 2I think the continuation vehicles still, continue some of that, that issue, quote, unquote, these, these mostly are not infinite length vehicles. What was interesting to hear as we went through this cover story was secondaries, advisors and buyers noting that some of the infrastructure continuation vehicles are getting longer in the term length, it used to be maybe three to five years. And that's maybe going more towards a seven to 10 year fund life for some of these continuation vehicles. But it is still being held in a closed end vehicle for the majority of those EQTs, not one of those, which I'm sure we'll get to. But that is the general trend.
Speaker 1Okay. So with that out of the way, is it completely dispelled, or at least in our asset class, this notion that a CV was a way to sweep something baddish under the carpet and kick the can down the road. And we are firmly talking about putting your best assets, giving them more time either to get a better exit one day to grow them a bit more, etc. We firmly there.
Speaker 2I think, again, from talking to people for the story, I don't think you can get as far down the line with this process to be sweeping a bad asset under the carpet. I remember reporting a few years ago, what a lot of LPs were getting frustrated by was that actually, they hadn't read the terms and conditions properly. And there are some mechanisms in the fun terms that allowed the GP to basically roll into a continuation vehicle almost without complete LP say so. GPs can't get that far down the road anymore, the game has changed, you just don't have the availability to do those terms and conditions. And I think if a GP did try to bring an underperforming asset to a continuation vehicle, I think LPs have enough both sense and data to say no to that kind of thing. So it's kind of difficult for a GP to get away with that.
Speaker 1And how much of the change is also about LPs actually going to GPs and sort of encouraging slash incentivizing them to move some of their best performing assets into these structures?
Speaker 2So that was that was the real step change in reporting for the story than than what we've ever done before was just hearing from so many people that the game has changed. Beforehand, you might have LPs as we were alluding to before asking GPs, why are you rolling this into a continuation vehicle? Why don't you just sell it? And now you have LPs asking GPs, why are you selling this asset? Why don't you roll it into a continuation vehicle? And so that was really interesting to hear, you know, LPs see a high performing asset, and they maybe want to continue with it. And I think as we've explored in some of our reporting elsewhere, there is so much performance dispersion in this asset class that actually having a really high performing asset is maybe more there than than one might think. And so if you want to keep those returns going, an LP would be quite inclined to do so. There are still a lot of limitations on some LPs as to being able to roll into continuation vehicles that stops them just the way their organizations work. There are some portfolio allocation issues with doing so. It's not a huge change in that LPs are massively embracing continuation vehicles, but there you do see more signs of them doing so.
Speaker 1The point you made is really interesting. In the sense that LPs are embracing this, maybe not so much because of some kind of duration mismatch that they are seeking to correct, but more we have found a good thing you know blind pools can can be tricky we know these assets perform and because they are performant we want to hold on to them because actually performance dispersion is bigger than we thought so you you feel that that is maybe the driver for the lp right is we have a good thing and we want to hold on to it for a bit longer uh for that that reason only right
Speaker 2yeah there'll be other reasons lps will want to roll over but in certain cases that would be a big one and it'll be a big incentivizer for gps as well i mean one of the standout comments in the cover story was mark private talk from gi partners uh their digital infrastructure platform and he was talking about a continuation vehicle that actually their private equity team did with a data center platform and data infrastructure team rolled into it but he said that um high quality platforms don't grow on trees and that actually getting a really high quality data form with the right counterparts and the right contracts and really good projects is is not as easy as some people think and actually when you've got one of those and you see that what's really the point in then selling it because that's kind of what you've been told to do and then go out and try and buy the next version of what you've already got you might as well keep it yeah no of course
Speaker 1and this is where i can uh i can imagine somebody with an open-ended fund at this point saying a very big i told you so to to the market but you know as andreakberg also said in our podcast as good as as open-ended funds can be the reality is a lot of lps do need liquidity they do need to sell and not everything will be in an open-ended fund which makes total sense i've noticed we've started drifting inevitably into the digital infrastructure data center space as we talk about cvs that of course there are good reasons for that we cannot escape the theme of these things we cannot escape the theme these days but it is true they're particularly well suited to these continuation vehicles although they you know they come with a twist because they are high growth platforms really and that is what you are backing versus something stable like gatwick airport or even inkia from i-squared right where the focus there is on you know yield and stabilized assets if you want to call them
Speaker 2that yeah one of these elements is that you have data center being backed by mid-market sponsors and then these data center platforms start growing and growing growing into something that should probably be backed by large cap sponsors or at least just more money so they're kind of growing into something that needs to be backed by a continuation fund so you know we mentioned gi partners you've also had fengate very much a mid-market group a couple years ago doing a data center continuation fund and obviously you had eqt but that's on the larger end the sector just with the other end of the spectrum is kind of growing and growing and the amount of growth capital that it needs really it grows out of a mid-market fund quite quickly
Speaker 1yeah well and the very interesting point that that is going to pose to those managers right as mid-market managers you back this high growth sector and you get catapulted all of a sudden into managing what can become very very large scale platforms and it's going to be interesting because cvs of course tie these platforms back to the original managers and now lps are going to figure out themselves whether they really can manage these very large scale platforms because they won't be mid-market investments anymore
Speaker 2will they no no but i think again it goes down to performance and if you have a very high performing asset you're not going to complain whether it looks like a mid-market one or a large cap one
Speaker 1no absolutely it's going to be fascinating to see if people can scale up adequately but we we will find out in the coming years yes
Speaker 2like mark said they don't grow on trees so they're not going to grow on trees they're going to grow on trees there's only a finite number of these
Speaker 1but i mean i think one of the most interesting examples of the potential of of cvs as they pertain to a bridge to sort of high growth capital intensive uh platform funding for want of a better word is obviously eqt's new ai infrastructure strategy i think by now the details are well known but it's strategy built around edge connects their global data center platform they held it since 2020 the platform was growing it needed a lot of capital some lps needed to exit it also so it got moved into a continuation vehicle that was sort of the let's call it the catalyst for the ai infrastructure strategy this got 2.7 billion there about us dollars of secondaries capital that then catapulted further fundraising until in roughly three months the platform had formed or rather the new ai infrastructure strategy had formed circa 9.4 billion us dollars of capital most of it primary some secondary capital there some nav appreciation also kind of compounding everything but i mean this is a real good example right of a secondary trade being almost like a foundational trade to then create a new strategy because essentially this is what eqt strategy is
Speaker 2right yeah this was certainly a unique move but it was a very high performing asset you know the new york city pension been a co-investor in that one and their data is showing over 30 net irr for that so how many infrastructure assets are delivering that but also this is a platform that really needs more capital it's grown massively from a u.s focused platform to a global one and there's little point in having a new strategy to do that so i think having it in a closed-ended vehicle the open-end makes far more sense
Speaker 1for it yeah and and jan vesely uh one of eqt's ai infrastructure chiefs um told the infrastructure investor podcast that they really needed to raise tremendous amounts of money which they just couldn't from obviously from there and they of course manage large cap strategies but it doesn't matter because the capital needs of this sector are immense and so they had to create a structure for it and so i i think this is a really good example of how we can do this and i think it's a really good example of leads us to a sort of a adjacent topic right which i've been personally interested in writing about which is let's call it the pulling power of platforms to raise capital amounts that really rival traditional blind pool fundraising right because i think that was one of the appealing elements of the ai infrastructure strategy was edge connects here and it's not a blind pool this is about growing edge connects high performing etc etc right how do you feel about this are we going to see this phenomenon now in the next few years where these large-scale platforms are rivaling blind pools i i
Speaker 2wonder if maybe we we have i want to reach the peak that sounds a little too dramatic for what we're talking about but maybe that platform's almost being like fundraising platforms starts to evolve a little bit as you're right the last three years or so we have seen platforms themselves keep on raising capital in a kind of fundraising structure almost looks public markets-esque in a way and was happening when public markets were a bit of a downbeat we are now seeing a return to ipo exits you know take i squared to greco last month filing for a new york ipo that's a huge platform that itself used to be listed and then die squared saw more value in the private markets and we've had reports of some other data center platforms exploring ipos as well and so if the ipo market comes back then do we still have those same platforms raising capital they might seek an exit in a different way and we'll probably reach a stage where we have both going on and depending on what ipo is better for and what a private market platform is still better
Speaker 1for yeah that's what i was going to pick up on because i think as soon as you stick platforms in the public market then they will have to behave according to public market requirements and you're going to need dividends, and you're going to need certain things. And maybe if you're in full growth mode, or you still feel that there is a lot to do, you do not want to put that kind of straightjacket. I can certainly see, as we've already seen happen with Blackstone not that long ago, large stabilized platforms being IPO'd or listed because they already can, you know, they can fit the public market constraints better, I think. I do think if there is growth involved and high growth, then you probably will benefit from being in the private markets, and you can attract large amounts of money to do so.
Speaker 2Yeah, we all know what's powering the public markets at the moment, and that's AI and data centers and everything associated with that. So if you're looking for a good exit, you'll be considering that.
Speaker 1Yeah, and this is actually a really good point. Because in theory, right, conceptually, you can see this structure, you could see similar structures in kind of secondaries, foundational trade, moving a platform of ports or whatever, into some kind of CV that then raises significant amounts of primary capital. But we would be naive to pretend that a lot of this isn't happening, because these platforms are AI infrastructure focused and focused on data centers. What are your thoughts on the feasibility of, you know, platforms as fundraising mechanisms for other sectors outside of this high growth one we're talking about?
Speaker 2I think, And to go back to the cover story, it was interesting speaking to Gautam Bhandari from capital on the inkia continuation vehicle where i mean you maybe get a sense that a lot of continuation vehicles are done to host growth assets they actually did it for what was quite a core asset by this point inkia owns 25 of pru's power market and he was saying that for growth platforms for the kind of thing you're talking about we have our closed-end funds for that we have our flagship strategy and for something more core like something that's stabilized that the continuation vehicle kind of made sense for them so maybe you see capital going towards core platforms in in that sense yeah i think
Speaker 1that the gist of it is you really can still i think the this is far from a settled theme let's put it this way i think everybody is still figuring it out you can clearly raise a lot of money if you get it right and you have the right platforms i think we're far from stabilized as to being able to say here's the model now go replicate it because there isn't a model at this point right yeah zach what else was interesting about the cover story to bring out you know
Speaker 2we've spoken a lot about gp leds and continuation vehicles and i think a couple years ago we did another cover story on the growth of lp leds at that point and it does seem like that was a bit of a moment in time kind of 2023 2024 where lps were using secondaries for portfolio reallocation um portfolio adjustment and i think there was a hope when we did that that we will continue to see more of a lp led market grow and grow that seems to have mellowed we're not seeing the height of activity that we were three years ago i think in the campbell actions report the the lp led infrastructure activity was was four percent of all lp led activity in private markets and that was down from six percent in h1 2025 and we did have people talking to us in this story saying that the lp led market has not grown quite as much as they thought it would and that has actually led to the gp led market growing a bit more where you have these secondaries buyers looking to deploy their capital they can't find lp led deals in the way they could two three years ago they're moving more towards gp leds yeah
Speaker 1i'm curious if they offered some explanations to this point about it being a moment in time is is well made i think we know that infrastructure secondary assets they price well and so if you were forced to sell then you could make a case that they were good assets to go and sell first so the fact that lp lads are diminishing is it due to this rebalancing not being there anymore infrastructure being somewhat under allocated to um from an lp point of view so there's no need to sell i'm curious what people offered by way of explanations
Speaker 2yeah i think that's definitely one aspect the pricing aspect is definitely one reason why it hasn't quite continued to be something that is used to rotate portfolios as such i think also this again goes down to a age and sophistication point those managing private equity portfolios have used the lp led market a bit more in the past it's kind of the rigor now to use the secondary's market to manage your lp led portfolio uh that's yet to come within such a as we said before you've got portfolios and funds that haven't quite yet reached a maturity level
Speaker 1for that yeah and i guess the counterpoint to that and maybe a good note to end on is that while the lp lads did have a moment in time a few years ago they are almost certainly going to have a moment in time again when the asset class is more mature a few years down the line and so when you look at the whole picture and you look at increasing amounts of money raised by secondaries funds that need to be deployed mostly being used to manage the lp leds and so i think that's a good way to look at it and i think that's a good way to look at it and i think that's a good way to look at finding their home in gp lads and continuation funds but then further down the line another moment in time when lp lads will again rise up i think we're ending up with well what looks like quite a healthy roadmap for secondaries development going forward right
Speaker 2yeah i didn't i don't mean to trash the last 20 minutes of of what we've spoken about and all the tailwinds for various things but um the other thing that did come out in this cover story is that this is something that is going to change over time that this will look quite volatile we'll have the lp led market which will be based somewhat on macro factors affecting portfolios at those various points so we will see them then rise at a various point and we will see them come down and we also see the continuation vehicle market often spearheaded by large transactions so you know while h1 2026 as we said infrastructure might have been 15 percent of all private markets gp leds and secondaries leds but h1 2027 based on the volume of these deals it might be 10 and so it is something that will see quite a bit of change as we move
Speaker 1forward yes no i think that's you know point taken i think also that secondaries are a very inventive um group of people and when you think about the approaches to asset holders outside of the traditional fund manager universe to use secondaries technologies to get those assets into more traditional fund structures i have a feeling these folks will find avenues of growth as some of the more traditional ones maybe turn a bit lumpy but this is fascinating it's you know it's incredible to see how cvs and gp lads have evolved from when we first wrote about them many many years ago and i think i have a feeling we're going to be talking about this for many years to come but zach thank you thanks a lot for your insights and thank you for coming on the podcast thank
Speaker 2you bruno great to be here that again was america's
Speaker 1editor zach bentley to hear more of our episodes head over to infrastructureinvestor.com forward slash podcast or you can search and subscribe to the infrastructure investor podcast wherever you like to listen
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