Private equity’s evolving ownership structures are rewriting the rules for portfolio leadership. The surge in continuation funds—up 30% YoY according to Bain’s 2025 Global Private Equity Report—as well as minority recapitalizations, is extending average hold periods from 3–5 years to 7–10 years or more.
Secondaries, once viewed primarily as liquidity solutions for LPs, have matured into sophisticated strategic tools. These transactions—whether through GP-led continuation vehicles, tender offers, or strip sales—offer a flexible mechanism for sponsors to extend ownership of high-performing assets while delivering partial liquidity to existing investors. The global secondaries market reached over $110 billion in volume in 2024, with GP-led deals accounting for more than half of that activity.
This shift makes the traditional “transactional CEO” model—leaders brought in for a two to three year sprint to exit—less relevant. Today’s reality requires a new archetype: the Long-Hold CEO.
These executives must do more than optimize for an exit. They need to:
- Navigate multiple ownership transitions (including co-investors or LP rollovers)
- Drive multi-stage value creation, often through digital transformation and M&A
- Sustain employee morale and cultural alignment over an extended horizon
This model is gaining traction. In a 2025 survey by EY, 71% of PE firms said they are actively changing their CEO hiring criteria to reflect longer hold periods, prioritizing adaptability, resilience, and alignment with multi-phase strategic planning.
However, the rise of the long-hold CEO also introduces new risks—especially when firms fail to recognize that their incumbent CEO may no longer be the right fit. The most common pitfall? A mismatch between the CEO’s skill set or incentive structure and the new reality of long-term value creation. A leader optimized for fast execution and short-term wins may become complacent or disengaged when the sprint turns into a marathon.
Complacency is costly. Misaligned leadership can stall innovation, dampen organizational energy, and slow the deal’s path to exit. It may also hinder operational rigor and misguide capital allocation decisions that are essential in the latter stages of a hold period.
This is why PE firms must conduct a clear-eyed, realistic assessment of both the business’s current maturity and the leadership team’s capacity to deliver value over an extended horizon. Sponsors should be asking:
- Is our CEO energized by the evolving strategy and ownership structure?
- Do their skills align with what the company needs to thrive in years 5–10, not just 0–3?
- Are incentives structured to retain and motivate this executive through to a successful second exit—or do they encourage stagnation?
Private equity investment professionals and portfolio operations/value creation teams must be prepared to make tough calls. Sometimes, maximizing value requires leadership change—not because of underperformance, but because the game itself has changed. PE firms that are willing to engage in a realistic assessment of their portfolio company CEO and C-Suite talent, make the tough decision to change leadership where strategically called for, and align their leadership timelines and equity packages with their evolving capital structures will not only build more resilient businesses—they’ll deliver superior long-term returns.