Golub Capital, a prominent player in the financial services sector, is embarking on a substantial initiative by committing at least $1 billion of its own capital to a new platform designed for investing in private equity continuation vehicles. This strategic move highlights Golub's intention to expand into the rapidly evolving GP-led secondaries market, which has seen increased activity amidst challenging market conditions for deal exits.
The firm plans to not only deploy its own capital but also to raise external capital for a dedicated fund that will focus on continuation structures within private equity-owned middle-market companies across the United States and Europe. This strategy will primarily emphasize single-asset continuation funds, enabling sponsors to roll over high-performing portfolio companies into new vehicles. This approach aims to extend ownership while simultaneously providing liquidity options for existing investors.
Leading this initiative is Greg Cashman, Golub’s co-head of direct lending and a seasoned veteran with nearly 30 years of experience at the firm. With approximately $80 billion in assets under management and a $1.7 billion co-investment program already in place, Golub intends to leverage its extensive experience in direct deals as it forges ahead into GP-led opportunities.
The timing of this initiative reflects a broader shift in the market dynamics, where private equity managers are increasingly relying on continuation vehicles due to constrained deal exits. Factors such as elevated interest rates and tepid M&A activity have prompted a notable rise in the adoption of these vehicles, with GP-led secondaries accounting for nearly 20% of all private equity exits in the first half of 2025, a significant increase from 13% in the previous year.
Golub Capital joins a competitive landscape of major alternative asset managers, including Warburg Pincus, Leonard Green & Partners, New Mountain Capital, and HIG Capital, all of whom are launching similar strategies to inject capital into this segment. The growing interest is also reflected among institutional investors, such as the Teacher Retirement System of Texas, who are allocating resources to GP-led secondaries due to the appeal of yield, downside protection, and alignment with sponsors.
Looking ahead, Golub Capital's initiative is expected to bolster its position within the private equity landscape and offer enhanced liquidity solutions to existing investors. As the firm moves toward the operationalization of this platform, market participants will be closely watching its development and the implications for shareholders and employees in the evolving investment climate.