Oct 26, 2026 · 48 min
Texas Teachers subjects continuation vehicles to LP scrutiny
Continuation Vehicles from the LP Seat – Scott Ramsower (EP.523)
Continuation vehicles offer private-equity managers another exit route, but their conflicts, pricing, fees, and incentives can materially affect limited partners.
- 1Continuation vehicles require case-by-case underwriting because the GP may influence both sides of the transaction.
- 2Texas Teachers evaluates conflicts, pricing, alignment, and underlying assets rather than automatically buying or selling.
- 3Private-equity liquidity constraints are reshaping exits, retail capital, co-investment pipelines, and portfolio underwriting.
Don't miss
Ramsower’s closing juggling-balls analogy distinguishes priorities that can recover from those that require protection when neglected.
The brief
Scott Ramsower of the Teacher Retirement System of Texas traces the disciplined growth of its private-equity program before turning to the industry’s liquidity problem.
His central argument is neither pro- nor anti-continuation vehicle: each deal demands scrutiny of conflicts, price discovery, fees, alignment, and the underlying portfolio.
Ramsower warns that continuation vehicles can distort manager track records, cannibalize fee-free co-investment, and put pressure on private-equity returns if used systematically.
Texas Teachers responds with advisory-board involvement, an internal scorecard, and case-by-case elections to roll or sell positions, treating these deals like co-investments.
The conversation widens to zombie funds, constrained IPO exits, private-wealth capital, and deeper underwriting of unrealized portfolios as managers face a harder market.
Ramsower closes with a life-priorities lesson: work, family, friends, faith, and health are not equally recoverable when dropped.
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