A Pantheon-led deal worth more than €1 billion shows the tool that reshaped private equity exits spreading into private credit.
Continuation vehicles, the structures that let private equity firms hold on to prized assets past a fund's normal life, are moving into private credit.
Bridgepoint Credit has announced a continuation vehicle for Bridgepoint Direct Lending II, a transaction worth more than €1 billion led by secondaries investor Pantheon. The deal moves the fund's remaining loan portfolio into a new vehicle, giving existing investors the option to cash out or roll their stakes forward.
Why credit is different
In private equity, continuation vehicles usually involve a handful of companies the manager believes still have room to grow. The pitch is upside: the sponsor wants more time to create value before selling.
A direct lending portfolio offers something else. Loans pay regular interest and return principal at maturity, so the value of more time comes from continued income rather than a bigger exit. With most private loans carrying floating rates, the portfolio's yield has risen alongside benchmark rates, which makes it more attractive to a secondary buyer seeking steady cash flow.
For the fund's original investors, the structure offers liquidity at a time when distributions across private markets have been slow. For Pantheon and other buyers, it offers a seasoned portfolio with a known performance history rather than a blind pool.
The pricing question
The central tension in any continuation vehicle is price. The manager sits on both sides of the transaction, selling from an old fund to a new one it also controls. Secondary buyers act as the check on that conflict by setting the price they are willing to pay. In credit, that price typically lands close to the loans' carrying value, since there is less room for disagreement about the worth of a performing loan than about the future value of a company.
What to watch
The next question is whether other direct lenders follow. Managers of older credit funds facing investor pressure for liquidity now have a working template. A wave of similar transactions would signal that private credit is maturing into a market where portfolios trade, not just originate, and would give secondaries investors a new, large category to deploy capital into.