HIG Capital Pursues $1.5 Billion Fund to Back Private Equity Continuation Vehicles

Miami-based alternative asset manager HIG Capital has begun fundraising conversations for a new $1.5 billion vehicle designed to invest in other private equity firms’ single-asset continuation funds, marking the firm’s latest push into the expanding secondaries market.

The firm plans to launch formal fundraising efforts early next year, targeting investments of at least $50 million each across approximately 20 single-asset vehicles from private equity funds focused on middle-market companies, according to people familiar with the matter who requested anonymity to discuss confidential plans.

HIG Capital, which manages roughly $70 billion across various investment strategies, already maintains relationships with more than 800 private equity managers. The new fund would allow the firm to capitalize on a growing trend where asset managers seek liquidity solutions without fully exiting investments.

Secondaries Market Gains Momentum

Continuation vehicles have emerged as a preferred exit mechanism for private equity sponsors facing constrained traditional exit routes. These structures enable firms to transfer high-performing or difficult-to-sell portfolio companies from one fund into a new vehicle, extending the holding period while providing liquidity to existing investors.

Data from Jefferies Financial Group shows continuation funds accounted for nearly one-fifth of private equity exits during the first half of 2025, up from 13% for the full prior year. The uptick reflects persistent headwinds in mergers and acquisitions markets, where elevated interest rates have dampened deal activity for the past several years.

HIG Capital joins a growing roster of asset managers pursuing similar strategies. Warburg Pincus, Leonard Green & Partners, and New Mountain Capital have all moved to expand their secondaries capabilities, recognizing the demand for alternative liquidity paths as traditional IPO and M&A markets remain subdued.

HIG Capital Expands Platform Capabilities

Founded in 1993 by Sami Mnaymneh, founder, executive chairman and CEO, and Tony Tamer, founder and executive chairman, HIG Capital has built a diversified platform spanning private equity, growth equity, credit, infrastructure, real estate and special situations strategies. The firm maintains offices across the United States and international affiliate locations in Europe, Latin America, the Middle East and Asia.

Earlier this year, HIG Capital recruited four executives from Morgan Stanley’s private equity secondaries team to spearhead its expansion into GP-led transactions. Dan Wieder joins as managing director, alongside managing director Yash Gupta and principals Austin Gerber and Joe Holleran. The quartet brings nearly five decades of combined experience in secondaries investing.

The firm has indicated plans to add additional secondaries staff and redeploy existing HIG Capital personnel to the team over the next 18 months. While the strategy remains under development, the firm has not yet determined whether the new fund will back its own continuation vehicles.

Middle-Market Focus Aligns With Core Strategy

The new vehicle will concentrate on middle-market transactions, consistent with HIG Capital’s broader investment approach. Though not committed to specific sectors, the fund may emphasize business services, industrials, healthcare and consumer sectors where HIG Capital maintains established expertise and deal flow.

HIG Capital’s existing private equity operations have demonstrated consistent activity across these industries. Recent transactions include the acquisition of 4Refuel, a mobile on-site refueling provider, and the completion of a merger between Converge Technology Solutions and Mainline Information Systems to form Pellera Technologies, generating approximately $4 billion in combined revenue.

The firm has also executed several portfolio company exits this year, including the sale of SoldierPoint Digital Health to GovCIO and the divestiture of Soleo Health to funds managed by Court Square Capital and WindRose Health Investors.

Market observers note that GP-led transactions have gained prominence as sponsors seek flexible monetization options for portfolio assets. Continuation vehicles offer an alternative when companies have outgrown their original funds but remain unsuitable for immediate sale or public listing.

The structure has proven particularly useful for assets requiring additional time to reach their full valuation potential or operating in sectors experiencing temporary market volatility. For incoming investors, these vehicles provide access to mature portfolio companies with established track records, typically offering shorter duration profiles compared to traditional primary funds.

HIG Capital declined to comment on the fundraising plans or the specifics of the secondaries strategy.

The firm’s move into secondaries comes amid broader industry expansion into alternative liquidity solutions. Private equity firms have increasingly recognized that traditional exit timelines no longer accommodate every portfolio company, creating demand for structures that balance investor liquidity needs with sponsor conviction in long-term value creation.

With its extensive network of private equity relationships and established middle-market presence, HIG Capital appears positioned to compete in a secondaries market that has grown more crowded as larger asset managers seek to diversify their product offerings and fee streams.