Continuation funds may be solving your capital constraints—but are they creating blind spots in leadership?
As real estate sponsors increasingly turn to continuation vehicles to unlock liquidity while holding onto prized assets, much of the attention understandably focuses on capital structures, valuations, and LP alignment. But too often, one foundational element is overlooked—a strategy for talent.
If you’re stewarding assets into a new chapter, your leadership bench shouldn’t be left behind. After all, the quality of execution during the next hold period will directly affect investor outcomes; and, that execution depends on people.
Talent Strategy is Asset Strategy
Real estate professionals are no strangers to planning around physical assets. You underwrite meticulously, model cash flows, consider renovations, and disposition timing. In short, you think in terms of value creation over time.
Talent strategy deserves the same rigor.
Ask yourself:
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- Is the existing executive team structured for a long-hold operating model?
- Are there gaps in capabilities that may not have mattered under the prior time horizon, but are now mission-critical (e.g., asset optimization, data-driven operations, sustainability)?
- Is leadership alignment strong enough to take the asset through its next evolution, or is there a silent need for recalibration?
A continuation vehicle isn’t just a rollover of capital; it is also a time to reset priorities in the leadership team.
Four Parallels Between Asset & Talent Strategy
| Asset Strategy | Talent Strategy |
| Underwrite the asset | Evaluate leadership strengths and gaps |
| Execute value-add improvements | Infuse new capabilities or upgrade roles |
| Optimize hold period performance | Align team incentives to long-term objectives |
| Time the next exit or recap event | Prepare leadership for strategic inflection |
Talent Strategy Checklist for Continuation Vehicles
If you’re forming a continuation fund, here’s a concise checklist to ensure your executive strategy is just as intentional as your asset strategy:
1. Leadership Audit
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- Assess the current team’s strengths, gaps, and succession risk.
- Identify roles that may not have been critical under the old timeline but are vital under the new one.
2. Define the New Mandate
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- Clearly articulate how the next hold period differs: operationally, culturally, and strategically.
- Redefine leadership mandates with forward-looking clarity, not backward-looking familiarity.
- Ensure everyone on the team understands and buys into the shift.
3. Inject Operational Firepower
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- Consider where functional upgrades are needed such as portfolio management, asset management, capital markets, finance, operations, and data analytics.
- Prioritize leaders who have driven long-term value creation—not just transactional execution.
4. Align Incentives to the New Hold Period
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- Retool comp structures to match the new time horizon and value-creation goals.
- Ensure equity or profit-sharing aligns leaders with LP performance expectations.
5. Plan for Succession and Scalability
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- Think 5–7 years ahead. Who is going to lead the next recap or exit?
- Build a bench now that can grow into expanded or shifted roles.
What About Sponsors Who Already Have Strong Teams?
Many sponsors feel their teams are battle-tested. That may be true but continuation funds change the rules:
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- Longer duration shifts the risk from deal-making to operating.
- Different capital partners demand new governance structures.
- New exit paths may require leadership to scale or reposition.
The best teams don’t just endure these shifts—they evolve with them. Even a light recalibration can unlock significant operational alpha.
The Bottom Line
Continuation funds offer elegant capital solutions—but they introduce new leadership requirements. Without a clear talent strategy, sponsors risk letting strong assets stagnate when they should be accelerating performance.
The future performance of the continuation fund hinges on the strength of your executive team. And just like the underlying assets, that team needs thoughtful underwriting, value-add investment, and strategic alignment.
About the Author
Sun-Sun de Swaan
Partner
sdeswaan@mbexec.com
Sun-Sun de Swaan serves as a Partner at McDermott + Bull in the New York office where she leads the firm’s real estate practice. Sun-Sun brings over 20 years of real estate experience and works with clients across the sector, including firms involved with investment, development, financing, and property management. She has experience in a variety of functions across the industry, shaping her expertise and ability to deliver best-in-class talent to clients across the board.