General Catalyst was reportedly preparing a continuation fund targeting $800 million to $1 billion in October 2024, but the available reporting does not confirm that the vehicle closed or identify its final portfolio. The proposal matters because a continuation fund can give existing investors a choice between cashing out and keeping exposure—while putting the same investment manager on both sides of a potentially conflicted sale.
What was reported about General Catalyst’s proposed fund?
On October 7, 2024, TechCrunch reported, citing a person familiar with the plans, that General Catalyst was preparing a continuation fund with a target of $800 million to $1 billion. The report said the portfolio was still being determined. Stripe, Gusto, and Circle were described as possible holdings, not confirmed assets. TechCrunch also reported that Jefferies had been hired as secondary investment adviser. General Catalyst did not respond to the publication’s request for comment. TechCrunch’s October 7, 2024 report
That account described a proposed transaction, not a completed fundraise. A later TechCrunch report said General Catalyst announced $8 billion in new funds on October 24, 2024, but that separate announcement does not establish whether this particular continuation vehicle launched or closed. TechCrunch’s October 24, 2024 report The outcome of the proposed vehicle and any eventual holdings therefore remain unconfirmed in the cited reporting.
How does a continuation fund work?
A continuation vehicle is a new fund created by an investment sponsor to buy one or more assets from an older fund managed by that same sponsor. Existing investors in the older fund—limited partners, or LPs—are generally offered a choice: sell their interest for cash at the transaction price, or roll their exposure into the new vehicle. The new fund may also bring in new investors. This structure can provide liquidity to LPs who want to exit while giving the sponsor more time to hold and develop an investment. CFA Institute Research and Policy Center Cooley’s continuation-fund primer
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It is different from an LP-led secondary sale. In an LP-led transaction, an individual investor sells their interest in a fund; the sponsor does not transfer portfolio assets into a new sponsor-led vehicle. Cooley’s primer
Why can the structure be useful—and controversial?
Liquidity and more time for an investment
Closed-end funds have finite lives, while a portfolio company’s growth or route to an exit may take longer. A continuation fund can give the manager more time and let investors who prefer liquidity sell rather than remain invested. Such transactions can also provide liquidity when IPO and merger-and-acquisition exits are subdued. CFA Institute Research and Policy Center
A manager on both sides of the deal
The sponsor manages the legacy fund that sells the asset and the continuation fund that buys it. That creates a conflict over whether the price is fair to both groups of investors, as well as over transaction fees, ongoing management fees, carried interest, disclosure, and the time and information existing LPs receive to make their election. The CFA Institute Research and Policy Center describes the issue this way: “The GP serves as the fiduciary for both sides of the same transaction — the continuation fund (the buyer) and the legacy fund (the seller).” CFA Institute Research and Policy Center
What should investors examine in a proposal?
Cooley identifies three core questions: why the asset is staying with the manager, how the price is set and validated, and what existing investors are offered. Cooley’s primer In practice, investors comparing a continuation proposal with an outright secondary sale or another liquidity route should examine:
- Rationale and plan: Why does the asset need more time with this manager, and what specific value-creation plan or new capital supports the case?
- Price discovery: How was the price established, and was it tested with independent buyers?
- LP choices: What price and terms apply to cashing out versus rolling over, and how much time and information do LPs receive before choosing?
- Fees and carry: What transaction costs, management fees, and carried-interest terms will apply to the old and new vehicles?
- Conflict safeguards: How are the manager’s competing interests disclosed and addressed?
How large is this market, and what figures apply to this deal?
The reported $800 million to $1 billion range was a target for General Catalyst’s proposed vehicle, according to TechCrunch’s October 2024 report citing a person familiar with the plans. It was not a verified final fund size. TechCrunch also reported that General Catalyst had $25 billion in assets under management as of 2023; that is a dated figure, not a current AUM measure. TechCrunch
For broader context, the CFA Institute Research and Policy Center cited Jefferies’ estimate of $63 billion in global continuation-fund transaction volume in 2024. The report also estimated that 80%–90% of legacy LPs choose liquidity rather than rolling over. Those are industry-wide figures, not results for General Catalyst’s proposed transaction or its LPs. CFA Institute Research and Policy Center
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