Endowments and foundations managing $50 million to $200 million in total assets are turning to GP-led continuation vehicles to collapse deployment timelines that would otherwise stretch across multiple vintage years. Three separate outsourced chief investment officers confirmed the pattern in statements this week, citing pressure from boards uncomfortable waiting 7 to 10 years for meaningful cash returns from traditional primary commitments.

The mechanics are specific. Instead of committing to a new Fund IV that will take 18 to 24 months to deploy capital and another 4 to 6 years to reach peak valuation, these smaller institutions are writing $2 million to $10 million checks into secondaries where the general partner rolls 3 to 8 portfolio companies into a continuation fund. The LP buys in at a modest premium to the last mark—typically 5% to 12% above the most recent 409A or audited NAV—and immediately owns a book of assets already 3 to 5 years into their hold periods. Distributions often begin within 12 to 18 months.

This is not about alpha. The OCIOs describe clients who need to show their boards that private markets allocations are working before the current executive director retires or the next capital campaign begins. A $120 million endowment committing $15 million to privates across three funds in 2022 would still be sitting on uncalled capital and paper gains in 2025. The same endowment writing $5 million into a continuation vehicle in early 2024 is receiving quarterly statements showing realized proceeds by year-end. The board sees cash. The allocation gets renewed.

The structural consequence is that pricing discipline erodes at the small end of the LP base. GPs structuring continuation vehicles know that a $75 million foundation cannot wait for the 2029 exit and will pay 8% to 10% over the last mark to buy certainty. Larger institutions with decades of vintage diversification can afford patience. Smaller LPs, especially those working through OCIOs who charge on deployed capital, cannot. The result is a bifurcated secondary market where continuation vehicles aimed at sub-$200 million institutions clear at premiums 3 to 5 percentage points higher than those marketed to pensions and sovereign wealth funds.

Operators and allocators should watch three follow-on events. First, whether the Q2 2025 crop of GP-led deals includes explicit tranches sized for small institutionals, with minimums dropped from $10 million to $2 million. Second, whether the largest OCIOs—defined as those managing over $5 billion in aggregate AUM—begin offering proprietary continuation vehicle access as a client retention tool by mid-year. Third, whether endowments and foundations that bought into 2023 and 2024 continuation vehicles begin receiving distributions in Q3 2025, validating the thesis or exposing it as expensive beta.

The tell will be whether small LPs who compressed their deployment timelines in 2024 renew private markets allocations in 2026 at the same pace, or whether the board moves on once the optics problem is solved.