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One of the defining features of Private Equity (PE) is that an exit is contemplated at the point of entry. The appeal of any investment is, in material respects, determined by the ease with which an investor can convert upside in value into realisable returns. Yet for fund managers operating in Africa, that conversion remains a persistent challenge.
In 2025, the continent recorded 81 (eighty-one) exits in comparison to about 530 (five hundred and thirty) deals in the same year. Trade sales accounted for 38% of exits while secondary exits accounted for 26% of all exits in 2025, representing their highest share on record. With initial public offerings (IPOs) remaining scarce across most African markets, sponsor-to-sponsor transactions have emerged as an important alternative to traditional trade sales.
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Against this backdrop, continuation funds and other General Partner (GP) led secondary transactions are gaining prominence as tools for liquidity generation and capital return to investors. By enabling GPs to transfer mature or high-performing assets into successor vehicles while offering existing investors a liquidity option, these structures provide an alternative pathway to value realisation in a market characterised by limited exit channels.
This article examines the key legal and regulatory considerations arising from GP-led secondary transactions and continuation fund structures, with particular focus on their potential role in facilitating exits and capital returns within the Nigerian PE market. The primary statutory framework governing these transactions is the Investments and Securities Act 2025 (ISA), supplemented by the rules and regulations of the Securities and Exchange Commission (the SEC Rules).
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This article was first published in AVCA’s Legal and Regulatory Bulletin, Issue 12.