Scott Ramsower: Continuation Vehicles Mask Higher Fees and Fake DPI
Scott Ramsower reveals how continuation vehicles reset cost basis to inflate dollar fees and generate synthetic DPI that allocators now strip out.
Continuation Vehicles from the LP Seat – Scott Ramsower (EP.523)
With Ted Seides, Scott Ramsower · Sunday, November 1, 2026
Scott Ramsower, Head of Private Equity Funds at the Teacher Retirement System of Texas and ILPA Board Chair, joins Ted Seides to examine why institutional LPs have grown increasingly skeptical of continuation vehicles. Ramsower details a 10-point framework explaining LP pushback on GP-led secondaries, breaks down the math behind hidden fees and synthetic DPI, and assesses the broader market challenges surrounding zombie funds, retail private equity vehicles, and manager underwriting.
Key takeaways
- Texas TRS strips out synthetic DPI generated by continuation vehicles and NAV loans to evaluate GP performance strictly on real cash distributions from third-party buyers. Read more →
- The institutional assumption that an unrealized company held at cost automatically yields a 2x return at exit has collapsed under higher capital costs and slower distributions. Read more →
- According to Coller data cited by Ramsower, 54% of institutional limited partners expect the count of zombie funds in their portfolios to rise over the next two years, up from 28% two years ago. Read more →
- Continuation vehicles place general partners on both sides of the trade, turning managers into agents for both the selling fund and the incoming buyers. Read more →
- Scott Ramsower, Head of Private Equity Funds at the Teacher Retirement System of Texas and ILPA Board Chair, warns that retail private equity represents the right investment strategy inside the wrong legal vehicle. Read more →
5 articles from this episode
Texas Teachers Re-Underwrites GP Portfolios
Scott Ramsower of Texas Teachers explains why LPs now check secondary bids, public credit marks, and partner friction before re-upping with PE managers.
Scott Ramsower on Why Zombie Funds Will Spread
Scott Ramsower explains why continuation vehicles cannot rescue 2018-2022 buyout vintages, leaving LPs trapped in zombie funds.
Scott Ramsower on Why LPs Distrust Continuation Funds
Scott Ramsower details the 10 structural conflicts institutional LPs face when private equity GPs pitch continuation vehicles instead of exits.
Scott Ramsower on Why Retail Private Equity Structures Fail
Texas Teachers PE head Scott Ramsower explains why semi-liquid retail vehicles create structural conflicts and uncapped fund creep for institutional LPs.
More Capital Allocators episodes
- AI in the Investment Firm – Ben Harrison (EP.522)Oct 25 · 4 articles
- Building a Berkshire for the Middle Market – Tracy Britt Cool (EP.521)Oct 25 · 5 articles
- Senior Decision Makers: Erlina Yeo Terwelp, Columbia Investment Management Company (EP.520)Oct 18 · 4 articles
- Building the Total Portfolio at Ontario Teachers – Stephen McLennan (EP.518)Oct 11 · 5 articles