According to the Financial Times, roughly one-fifth of all private equity exits this year involved firms raising fresh cash from new suckers investors to buy portfolio companies from their own aging funds.

That's a sharp jump from the 12-13% seen in prior years, with Raymond James' Sunaina Sinha Haldea predicting a staggering $107 billion in these incestuous transactions for 2025, blowing past last year's $70 billion.

These so-called "continuation vehicles" let PE barons hand money back to restless limited partners in older funds while keeping control of the assets - and, crucially, resetting the clock on lucrative management fees and carried interest.

It's the ultimate have-your-cake-and-eat-it-too scam: cash out the old money, lock in the new money, and keep milking the same cow indefinitely.

"This year is set to break all records," Sinha Haldea crowed, calling it a "popular and effective win-win-win liquidity solution" in a market where real exits remain frozen.

Translation: when you can't find a greater fool outside your own circle, just invent a new fund and pass the hot potato internally.

Jefferies' Skip Fahrholz chimed in that global volume will hit close to $100 billion, confirming the feeding frenzy.

The FT reports the roster of perpetrators reads like a who's-who of the buyout racket: PAI Partners flipped part of its stake in ice cream giant Froneri (think Häagen-Dazs) to a continuation vehicle for the second time in a €15 billion-valued deal. Vista Equity, New Mountain Capital, and Inflexion all deployed multibillion-dollar continuation funds to cling to their crown-jewel investments rather than face the harsh light of public markets or genuine third-party buyers.

Even EQT's CEO Per Franzén, who hasn't yet dipped into this particular trough, recently admitted he wants in - purely to generate extra fees on existing holdings, naturally.

But beneath the sanitized industry spin lie the glaring conflicts: the same PE firm sits on both sides of the trade, deciding the price at which assets move from one of its pockets to another.

Pension funds and other LPs are rightly furious, fearing managers low-ball valuations to screw departing investors while setting themselves up for fat future carry on the "new" fund.

The Abu Dhabi Investment Council just sued U.S. firm Energy & Minerals Group over exactly this alleged grift: EMG tried to undervalue gas driller Ascent Resources in a self-sale that would have boosted its ownership and restarted fee collection.

The deal collapsed amid the lawsuit, and now outside bidders are circling.

What was once a last-resort lifeboat for dogs nobody wanted has morphed into a preferred tool for hoarding winning assets, all while the broader exit environment remains a graveyard.

Bain & Co's latest survey found nearly two-thirds of LPs still prefer old-fashioned exits—actual sales to outsiders or IPOs—over this circular money-shuffling charade.

Yet with no real buyers in sight, expect continuation vehicles to become the new normal: a glorified Ponzi mechanism dressed up in GP-LP alignment jargon, keeping the private equity bubble inflated just a little longer - until the music finally stops.