Sun Capital's Fletchers Deal Spotlights PE's 'Keep and Grow' Strategy

BOCA RATON, FL – February 11, 2026 – In a move that underscores a significant evolution in private equity strategy, an affiliate of Sun Capital Partners has finalized a single-asset continuation vehicle for Fletchers Solicitors, a premier UK law firm. The transaction allows the investment firm to retain and continue growing a star asset, highlighting a broader industry shift away from the traditional 'buy and sell' model toward a longer-term 'keep and grow' approach.

Since Sun Capital's initial investment in 2021, Fletchers has experienced explosive growth, with its earnings before interest, taxes, depreciation, and amortization (EBITDA) soaring from £8.0 million to a staggering £37.9 million as of September 2025. This deal provides a new runway for Fletchers, securing its future while offering a case study in modern private equity value creation.

A New Chapter for Fletchers and Sun Capital

The completion of the continuation vehicle is a pivotal moment for both the private equity firm and its portfolio company. For Fletchers, a specialist in clinical negligence and personal injury law, the transaction provides a fresh injection of capital and a long-term strategic horizon.

“The completion of this continuation vehicle is an important milestone for Fletchers,” said Peter Haden, CEO of Fletchers. “It gives us the long-term support to keep investing in our people and our platform, so we can stand alongside individuals and families during some of the most challenging moments of their lives.”

For Sun Capital, the deal represents its first-ever single-asset continuation vehicle, marking a strategic pivot. The structure was designed to provide its Fund VII investors with a choice: either cash out their investment for a liquidity event or roll their interests into the new vehicle to participate in Fletchers' anticipated future growth.

Underscoring their confidence in the law firm's trajectory, Sun Capital's General Partner not only reinvested its entire stake but also committed an additional $10 million through its Sun Capital Star Fund. “This transaction provides a choice to our valued Fund VII Limited Partners of either liquidity for this investment or participation in the expected continued growth in the value of Fletchers,” commented Sun Capital Founders Marc Leder and Rodger Krouse.

This is not a one-off maneuver. Sun Capital has already signed an agreement for a similar continuation vehicle for another portfolio company, Anderson Global, signaling a deliberate integration of this tool into its investment playbook.

“Since our partnership with Peter Haden and the Fletchers team in 2021, Fletchers has made improvements to the business, and we believe there is more growth to achieve,” added Alexander Wyndham, Managing Director at Sun European Partners, LLP, Sun Capital’s European adviser. “We are very pleased with this outcome and are looking forward to continuing to invest and grow the business with this additional capital.”

The Rise of the Continuation Vehicle

Sun Capital's move is part of a tidal wave reshaping the private equity landscape. Continuation vehicles, particularly those focused on a single asset, have surged in popularity, becoming what many in the industry now call the 'fourth exit.' Where firms once relied solely on IPOs, strategic sales, or sponsor-to-sponsor deals, they now have a powerful mechanism to hold onto their 'crown jewel' assets.

This trend is fueled by a confluence of factors. A sluggish environment for traditional M&A and public offerings has made exits more challenging, while general partners (GPs) are increasingly reluctant to part with high-performing companies that still have significant upside. Continuation funds solve this dilemma by creating a new fund, managed by the same GP, to buy the asset from the old fund.

Market data illustrates the dramatic growth of this strategy. The volume of these GP-led secondary transactions has exploded, with some industry analysts projecting the market to exceed $100 billion in 2025. This structure offers a dual benefit: it provides much-needed liquidity to limited partners (LPs) in the original fund who wish to exit, while allowing both the GP and other LPs to double down on a proven winner.

For new investors, these vehicles offer a de-risked entry point into a mature, high-quality asset with a clear growth plan and an established management team, bypassing the 'blind pool' risk of a traditional fund.

Navigating Conflicts and Complexity

Despite their growing acceptance, continuation vehicles are not without complexity and scrutiny. The primary concern is the inherent conflict of interest that arises when a GP acts as both the seller (on behalf of the old fund's LPs) and the buyer (on behalf of the new fund's LPs). This dynamic places immense pressure on achieving a fair valuation for the asset that satisfies both exiting and continuing investors.

To navigate this, firms typically engage third-party advisors to run a competitive bidding process and provide a fairness opinion on the price. In the Fletchers deal, Houlihan Lokey served as the exclusive financial advisor to Sun Capital, a step intended to ensure a transparent and market-tested valuation.

Regulators, including the U.S. Securities and Exchange Commission (SEC), have taken a keen interest in these transactions, focusing on transparency and the fiduciary duties of GPs. The increased oversight aims to protect LPs and ensure that the process is equitable for all parties involved. While these deals offer strategic advantages, the execution requires careful management of investor interests and a robust, transparent process to succeed.

A Blueprint for Growth in the UK Legal Market

Fletchers' remarkable performance, which made it an ideal candidate for a continuation vehicle, was forged in the highly competitive and regulated UK legal market. The firm's nearly five-fold EBITDA increase was driven by a combination of organic growth, operational enhancements, and a targeted strategy of ten add-on acquisitions since 2021.

This strategy of consolidation and investment is a direct and effective response to significant pressures within the UK's personal injury sector. A series of legislative changes, including the Jackson Reforms and new rules on fixed recoverable costs, have squeezed profitability and made scale and efficiency paramount. These reforms have favored larger, technologically advanced firms that can process high volumes of cases efficiently.

Fletchers has thrived in this environment by leveraging its "proprietary case-generation platform" to create a consistent pipeline of high-quality leads and by acquiring smaller practices to build market share. The capital provided by Sun Capital was critical to fueling this M&A strategy and investing in the technology needed to stay ahead. The new long-term funding from the continuation vehicle will allow Fletchers to continue this successful blueprint, further solidifying its position as a dominant player in a sector undergoing profound transformation.