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Data center owners are turning to the infrastructure secondaries market for capital, and getting pushback over unrealistic valuations, says Eddie Keith, Partner and Head of Infrastructure Secondaries in the Ares Secondaries Group. 

In a fascinating conversation, Keith tells Liquid Courage how digital infrastructure has rapidly evolved from a fringe asset class into one of the most active and compelling corners of the secondaries market, driven by capital needs that outpace what traditional fund structures can accommodate. 

Keith draws on nearly two decades of secondaries experience to lay out what separates a smart infrastructure secondary from a trap, why the asset class rewards diversification, and the criticality of  mature cash-flowing assets anchored to a strong development pipeline.

 Among the key takeaways:

• Troubled data center deals are of no interest to infrastructure secondary buyers. If a GP can't sell an asset through a traditional process, bringing it to the secondary market as a last resort is a signal to run — not a reason to look harder.

• Data center execs have inflated expectations on value. Some data center owners have valued their platforms at 1.3 to 1.4 MOIC, but due diligence done by infrastructure secondaries buyers have revealed valuations more in the 0.8 to 1.0 range. A data center owner will be hard pressed to sell assets at strong multiples without future revenues supported by contracted cash flows.

• Distressed secondary deals have been 'some of the worst.' The continuation vehicle market was born out of post-financial-crisis distress, and those early deals — broken assets from broken franchises that secondary capital was supposed to rescue — turned out to be some of the few reliable ways to lose money in a market with a thirty-year history of generating returns.

• LPs should not overallocate to digital infrastructure. Infrastructure investing moves in waves — digital was considered fringe before COVID made it the belle of the ball — and the investors who stay diversified across the full asset class are the ones who don't get caught over-indexed to last cycle's darling.

Access the full transcript and a searchable library of content at the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/data-center-deals-are-appearing-on

#coolvector #infrastructure #datacenter #secondary #privateequity

The private equity market has a zombie-firm problem, and in some cases, chronic misalignment that develops between LPs and GPs can best be remedied by the removal and replacement of the GP team. But how is this complicated and sensitive task accomplished?

James O’Donnell of Gibson Dunn, Joncarlo Mark and Eric Green of Upwelling Capital walk through the full lifecycle of a GP transition — from the early warning signs that a firm is in trouble, through the governance mechanics of building LP consensus, to the practical realities of installing a replacement manager. The conversation makes clear that GP removal is not always about bad actors; more often it’s a function of economic misalignment, deteriorated firm-level incentives, or founder dysfunction that leaves perfectly good assets stranded without competent stewardship. 

Key takeaways of this fascinating conversation include:

• LPs are forming teams for problem funds Because zombie and tail-end fund situations consume a disproportionate amount of time relative to their portfolio weight, a growing number of LPs are standing up dedicated special situations teams to manage these risks professionally rather than absorbing them into the general portfolio function.

• Sometimes a good GP should not run a problem investment A GP with a strong track record of sourcing and executing deals is not necessarily the right person to restructure a distressed portfolio — the skill sets are fundamentally different, and conflating them is one of the most common mistakes LPs make when evaluating their options.

• Founders ‘falling out’ creates GP replacement need A significant proportion of GP transition situations have nothing to do with investment performance and everything to do with co-founder disputes — when partners are fighting over the money rather than for it, LP capital is at direct risk and the case for intervention becomes urgent.

• How LPs can look for GP ‘alarm bells’ The clearest warning signs are a combination of a fund underwater and unlikely to clear its hurdle, a manager with no realistic path to raising a successor fund, and deteriorating reporting quality — individually inconclusive, but together a strong signal that the GP’s incentives have fundamentally shifted away from LP interests.

• LPs must proactively get transparency from GPs Rather than waiting until year ten or twelve to act, LPs should establish early rights to communicate with fellow LPs, set proactive information request agendas with their managers, and treat a GP’s failure to answer questions as itself a meaningful data point.

• LP vs LP conflicts are common Once LPs begin organizing around a potential GP transition, they frequently discover that the most intractable conflicts are not with the GP but among themselves — driven by differing exposure levels, co-investment stakes, and debt-versus-equity positions that create genuinely incompatible interests within the LP base.

• How long does it take to remove a GP? A GP removal can take anywhere from several months to several years, and LPs should scrutinize their LPAs at the time of investment for time-limited removal provisions that could expire before a problem is even fully diagnosed.

Access the full transcript and a searchable content library at the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/gp-transitions-when-and-how-to-install

#liquidcourage #secondary #secondarymarket #privateequity

What are the benefits of a private equity firm with a history of primary, direct investing combining with a secondaries specialist? Chris Jaroch and Pete Labbat of Bridgepoint count the ways.

In a fascinating conversation with Liquid Courage’s Joncarlo Mark and David Snow, Jaroch and Labbat discuss the 2025 merger of Bridgepoint, a $98 billion private marketts asset manager, with Newbury Partners, a veteran secondaries specialist with $4 billion in assets under management. Jaroch and Labbatt argue the combined Bridgepoint-Newbury will create advantages for the secondaries platform as a middle-market investor, as well as advantages for the broader Bridgepoint platform. 

“On the GP-led side, we can bring our industry expertise across all the sectors we play in at Bridgepoint to facilitate and, in some cases, increase the knowledge advantage that Newbury has when evaluating a GP-led transaction in healthcare or business services,” Labbat tells Liquid Courage. 

Among the takeaways in this episode of Liquid Courage:

• The acquisition of Newbury Partners was a natural fit because Newbury had already built its secondaries strategy around middle-market funds and assets — the same territory where Bridgepoint operates in its core business.

• GP-led continuation vehicles have become a mainstream tool for extending the life of winning portfolio companies, though a high percentage still fail to close, primarily due to valuation disputes between GPs and their LPs.

• Current market conditions — stalled M&A activity, a shut IPO window, and LP cash needs — are driving a surge in secondary transaction volume as investors take portfolio management into their own hands rather than waiting for traditional exits.

Access the transcript and a searchable content archive at the Liquid Courage Substack: https://open.substack.com/pub/liquidcouragepod/p/why-bridgepoint-and-newbury-combined?r=6l28kr&utm_campaign=post-expanded-share&utm_medium=web

#privateequity #secondary #middlemarket

The best time to take on a zombie fund is early in its long, nearly interminable life, is the key finding of this deep dive into private equity and private credit zombie funds. 

Indeed, it is possible to spot the potential for long-term underperformance in private equity and private credit fund as early as year five, according to new research from Upwelling Capital, led by Joncarlo Mark and Eric Green, who share their findings in this episode of Liquid Courage.

"How to Spot a Zombie Fund Before It's Too Late" offers market insights into zombie funds - how they perform relative to funds that are merely bottom-quartile, how to define and spot them, why it is important to remove them from your portfolio before the long-term value erosion kicks in, and how clawbacks complicate things further. 

Among the key takeaways of this episode:

• Early action is the only antidote. LPs who identify underperformance by year five can limit new capital deployment, terminate the investment period, or pursue a secondary sale while the fund still has meaningful value — all options that become far less effective the longer they wait.

• Year five is the decision point. Bottom decile funds peak at ~1.1x TVPI by year five and never meaningfully recover, making that the last realistic window to act before value erosion becomes irreversible.

• Zombie credit funds perform no better than zombie private equity funds in the long term.

• The costs are real, not just theoretical. Beyond opportunity cost, LPs in zombie-bound funds face hard dollar losses on multiple fronts — management fees charged well past their contractual end, monitoring fees extracted from portfolio companies, and the compounding damage done to the underlying businesses themselves, whose long-term value erodes when they are stranded inside a fund with no fresh capital, misaligned management, and no path to a disciplined exit.

• Zombie status requires more than bad returns —Upwelling's diagnostic requires a pattern of fourth-quartile performance across multiple funds, a 50%+ fundraising haircut on subsequent vehicles, and contraction of strategy breadth, not just a single underperforming fund.

• The secondary market offers a exit, but timing is everything.  The liquidity market has matured enough to provide a genuine escape route for LPs in deteriorating funds, but bottom decile positions are extremely hard to sell and will attract steep discounts, making year five or six — when the fund still has some TVPI — the optimal window to pursue a secondary before buyers lose interest entirely.

Access the full transcript and a searchable archive on the Liquid Courage Substack: 

LIVE WEBINAR: Join a live Liquid Courage webinar, May 13, 12 noon ET, called, "GP Transitions: When and How to Install a Replacement Fund Manager." Join a live Liquid Courage webinar about GP transitions, May 13. Register here: https://us06web.zoom.us/webinar/register/WN_LanZkPuATXqZp59ORcM39w?_gl=1*92blus*_gcl_au*MTEzOTU1MjQ3OS4xNzc3MjQ5MTk1*_ga*OTg1MDI2MjUyLjE3NzcyNDkyMDQ.*_ga_L8TBF28DDX*czE3Nzc5OTUwNTAkbzEwJGcxJHQxNzc3OTk2MTM4JGo1OSRsMCRoMA..#/registration

#privateequity #liquidcourage #privatecredit

All about the rise of continuation vehicles in private equity from the limited partner point of view. This deep-dive Liquid Courage conversation includes Sarah Farrell, Managing Principal and Head of Private Equity Europe and Asia at Allstate, Katrina Liao, a Partner at Coller Capital, Joncarlo Mark, Founder of Upwelling Capital and host David Snow.

CVs have given LPs genuine optionality at the asset level and a shift from passive blind-pool commitment to active portfolio decision-maker. That said, continuation vehicles carry real governance risks, in that the GP sits on both sides of the transaction and conflicts must be managed rigorously.

When structured correctly, a CV achieves genuine alignment between GP and LP on a shared conviction about the next stage of value creation, with the GP pricing an asset they know better than any outside buyer and putting their own economics at risk alongside their limited partners.

Some key takeaways from the conversation:

Continuation vehicle valuations are rife with potential conflicts. GP self-pricing, subjective fairness opinions, and secondary funds incentivized to compete on terms rather than price create a structurally compromised valuation environment that only rigorous independent process can correct. “If you have 20 people competing to give you capital as the primary underwriter in a secondary situation, aren’t you competing to give better terms to get the GP to pick you?” asks Sarah Farrell of Allstate.

LPs ‘all of a sudden’ are dealing with a flood of CVs. What was once an occasional portfolio tactic has become a major exit path, forcing LP organizations to rethink how they are resourced, governed, and mandated to evaluate single-asset decisions at scale. “You used to just do fund investing," says Joncarlo Mark of Upwelling. “You now have gotten a direction to go do co-investing. Now all of a sudden, every other week you’re getting presented with a CV from a manager in your existing portfolio.”

In CVs, investors already know the asset and the GP. The embedded knowledge an LP carries from the original fund — the management team, the business model, the risks — makes a CV roll decision structurally more defensible than most co-investment opportunities, and the return data is beginning to reflect that advantage. “In a CV, you’re not really taking a bet on the company as much, because they’ve owned the asset before,” says Katrina Liao of Coller. “It’s almost like a known management team — you know the skeletons in the closet. I see it as a much better investment opportunity than a co-investment.”

CV economics must ‘pass a sniff test’ Rolling LPs should expect identical terms to the fund they are exiting, and low GP carried interest rollover is the single most telling signal that a deal is structured for the manager’s benefit rather than the company’s next chapter.

ILPA’s new continuation-vehicle course: The Institutional Limited Partner Association — representing nearly 800 LP organizations globally — is now building dedicated CV education into its professional curriculum is itself a market signal that the asset class has crossed the threshold from novelty to norm. “This is a major trend. There’s a lot more that is happening in private market portfolios and it’s requiring LPs to have a lot more level of knowledge, sophistication, and control,” says Mark

Access the transcript and search the archive at the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/continuation-vehicles-are-here-for

#privateequity #liquidity #secondarymarket

As the investing public is now learning, “credit” and “liquidity” do not always pair well. This and many other facets of the rapidly growing credit secondary market are discussed in this Liquid Courage conversation between Ed Goldstein, Partner and CIO of Coller Credit Secondaries, and Eric Green, a Partner at secondaries advisory firm Upwelling Capital. 

Among the key takeaways:

• Credit secondaries is the fastest-growing corner of an already booming market. The private credit secondary market has doubled year-over-year, a growth rate that  outpaces the growth of the underlying primary market

• The BDC volatility story is a liquidity mismatch narrative, not a credit crisis. Goldstein and Green are clear that the current stress in non-traded and private BDCs reflects some retail investors misreading “semi-liquid” as “liquid.”

• The GP-led credit continuation vehicle is gaining in adoption. In just two years, the split in credit secondaries has flipped from roughly 80% LP-driven to nearly 50-50 GP-led, as fund managers sitting on nearly half a trillion dollars in unexited assets.

• Mid-sized credit managers face a Darwinian moment as capital concentrates at the top. With institutional LPs consolidating commitments behind mega-firms, some credit managers are heading into 2026 facing a primary fundraising wall that will push many of them toward the secondary credit market.

Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/liquid-courage-video-podcast/

#credit #liquidcourage #secondarymarket #liquidity #privateequity

GP demand for private equity secondary solutions is more about upside maximization than liquidity, says Nate Walton, the head of Ares Management's $42 billion secondaries business.

In a wide-ranging and enjoyable conversation with Liquid Courage's Joncarlo Mark and David Snow, Walton,  Partner and Head of Private Equity in the Ares Secondaries Group, talks about why his team looks for high-quality portfolios that can be tapped for further growth, and why Ares tends to avoid "rescue capital" situations.

Walton, the son of basketball legend Bill Walton, also shares memories of is own athletic achievements as captain of the Princeton basketball team as well as, briefly, a professional basketball player in France. 

More key takeaways from this fascinating conversation: 

• The continuation fund has become a standard instrument, not an exotic one. With roughly 80% of top GPs having now used one, Walton sees the CV solution as permanently embedded in private equity's toolkit, and predicts continuation fund volume will hit records in 2026 even as traditional M&A and exit markets recover.

• GP stakes and preferred financing are evolving into a sophisticated capital stack. Beyond simple equity stakes, Ares is structuring solutions using carried interest, management fees, and GP commitments as collateral, enabling succession planning, next-gen transitions, and fund-level capital formation in ways that didn't exist a decade ago.

• Real assets — particularly data centers and infrastructure — are the next frontier for secondaries. Walton sees the same GP-led continuation fund logic that matured in private equity now migrating into digital infrastructure, where long build cycles and illiquid assets create a natural demand for vehicles that let sponsors retain assets and clip yield over a 10–20 year horizon.

Access the full transcript on the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/ares-managements-nate-walton-says

#privateequity #secondarymarket #investing #liquidcourage #nba #basketball

When should you sell your interest in a private equity fund? Around year nine, according to new research from Upwelling Capital. Allow Liquid Courage to explain. 

This fascinating conversation among secondaries market insiders includes Ryan Binette, Managing Director and Co-head of Secondary Capital Advisory at Piper Sandler, Tom Kerr, Managing Director and Head of Secondaries at Hamilton Lane, Joncarlo Mark, Founder of Upwelling Capital, and David Snow, veteran financial journalist and host of Liquid Courage. 

The topic: "Tail-end funds" - private equity funds that have reached a level of maturity at which point investors must decide whether to stay committed to the limited partnership or to sell their interests in the secondaries market and redeploy the capital - even if selling means taking a discount. The Upwelling research findings are clear: sell at a discount and redeploy. 

Among the findings discussed in this episode of Liquid Courage:

• Private equity fund values tend to max out at nine years, then begin to decline • The weaker the fund performance, the earlier the valuation peak • Selling at at discount beats hold-and-pray, even after only a few years • LPs have a “selling window” during which they can sell a fund interest and achieve relatively similar long-term results • You should probably sell before the value of your distributions equals the total value of your investment

“I don't think anybody initially thought that these particular funds would go out 15 to 20 years. It's definitely a concern for certain investors.” - Ryan Binette, Piper Sandler

"The key for the investors to understand is you have to think about the opportunity cost of not selling positions, as opposed to, what is the discount that I'm gonna take?” - Joncarlo Mark, Upwelling Capital

“There's definitely funds that are back into the nineties that are still going. We at Hamilton Lane invested in a fund in 1996 that liquidated in 2022." - Tom Kerr, Hamilton Lane

Follow Liquid Courage on LinkedIn: https://www.linkedin.com/company/liquid-courage-video-podcast

Access the Upwelling Capital report, "No Country for Old Funds:" https://upwellingcapital.com/wp-content/uploads/2025/07/No-Country-for-Old-Funds-Summer-2025.pdf

#liquidcourage #privateequity #secondaries