GP demand for private equity secondary solutions is more about upside maximization than liquidity, says Nate Walton, the head of Ares Management's $42 billion secondaries business.
In a wide-ranging and enjoyable conversation with Liquid Courage's Joncarlo Mark and David Snow, Walton, Partner and Head of Private Equity in the Ares Secondaries Group, talks about why his team looks for high-quality portfolios that can be tapped for further growth, and why Ares tends to avoid "rescue capital" situations.
Walton, the son of basketball legend Bill Walton, also shares memories of is own athletic achievements as captain of the Princeton basketball team as well as, briefly, a professional basketball player in France.
More key takeaways from this fascinating conversation:
• The continuation fund has become a standard instrument, not an exotic one. With roughly 80% of top GPs having now used one, Walton sees the CV solution as permanently embedded in private equity's toolkit, and predicts continuation fund volume will hit records in 2026 even as traditional M&A and exit markets recover.
• GP stakes and preferred financing are evolving into a sophisticated capital stack. Beyond simple equity stakes, Ares is structuring solutions using carried interest, management fees, and GP commitments as collateral, enabling succession planning, next-gen transitions, and fund-level capital formation in ways that didn't exist a decade ago.
• Real assets — particularly data centers and infrastructure — are the next frontier for secondaries. Walton sees the same GP-led continuation fund logic that matured in private equity now migrating into digital infrastructure, where long build cycles and illiquid assets create a natural demand for vehicles that let sponsors retain assets and clip yield over a 10–20 year horizon.
Access the full transcript on the Liquid Courage Substack: https://liquidcouragepod.substack.com/p/ares-managements-nate-walton-says
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