PE managers mush for higher carried interest in continuation deals
Private equity firms are increasingly seeking enhanced carried interest arrangements, known as "super carry," on single-asset continuation vehicles, with nearly a third of new vehicles in the first half of 2026 featuring such terms, according to a Bloomberg report citing PJT Partners research.
Private equity firms are increasingly seeking enhanced carried interest arrangements on single-asset continuation vehicles, as managers look to capture a larger share of future gains from investments they are holding beyond the life of their original funds, according to a report by Bloomberg. The report cites research by PJT Partners as revealing that so-called “super carry” — typically defined as carried interest above the standard 12% to 20% range — featured in almost a third of new single-asset continuation vehicles launched during the first half of 2026. That represents nearly three times the proportion recorded a year earlier. This trend reflects the growing negotiating power managers can retain over their most sought-after assets, even as much of the private equity industry continues to face challenges exiting investments and returning capital to limited partners.
Super-carry arrangements typically come with performance hurdles, meaning managers only receive the additional share of profits if a continuation vehicle generates sufficiently strong returns. Thresholds can include an internal rate of return of 30%, a three-times multiple on invested capital, or a combination of performance measures. David Perdue, a partner in PJT’s strategic advisory group, said these structures can provide sponsors with an incentive to continue creating value after assets are transferred into continuation vehicles.
Parthenon Capital Partners sought enhanced economics as part of a transaction designed to extend its ownership of Kroll Bond Rating Agency. HarbourVest Partners ultimately backed the deal, enabling Parthenon to raise more than $1.7bn for the single-asset continuation vehicle after other investors resisted the proposed terms.
Percheron Capital secured super-carry provisions for a $1.62 billion continuation fund backed by investors including Blue Owl Capital, Iconiq, and Warburg Pincus, after some potential backers initially resisted the structure. Similarly, Leonard Green & Partners' Sage fund agreed to a super-carry arrangement for Falfurrias Management Partners’ investment in technology advisory business Crosslake.