Wacona's $210M Core States Deal Signals a Shift in PE Strategy

CHARLOTTESVILLE, VA – July 30, 2026 – In a move that speaks volumes about the evolving landscape of private equity, Wacona Capital has closed a $210 million single-asset continuation vehicle for Core States Group, a premier engineering and architectural services firm. The transaction, led by specialist investor Painswick Capital, is more than just a financial maneuver; it’s a powerful illustration of a strategic trend reshaping how private equity firms cultivate and retain their most valuable assets for the long haul.

For Wacona, a firm focused on the lower middle market, this deal allows it to double down on a proven winner. For Core States Group, the engine behind the national retail and logistics programs of many Fortune 100 companies, it provides the capital to accelerate its growth trajectory. And for the broader market, it validates the continuation vehicle as a sophisticated tool for creating lasting competitive advantage in an era defined by rapid change.

The Rise of the Continuation Vehicle

For years, the private equity model was straightforward: buy, grow, and sell within a fund’s fixed lifespan. But what happens when a portfolio company is hitting its stride just as the fund's clock is running out? The continuation vehicle (CV) provides the answer. This transaction effectively allows Wacona to sell Core States Group from its original fund to a new vehicle, which it also manages. This provides liquidity to the initial investors while allowing Wacona to maintain its stewardship and capture future upside.

This isn't just financial engineering; it's strategic patience. “We are thrilled to continue our partnership with President and CEO, Dave Dugan, and the team at Core States Group,” said Joel Carter, Managing Partner at Wacona. “This investment further positions Core States Group for continued growth through both organic expansion and M&A.” His statement underscores the core logic: when you have a winning combination of a great company and a strong management team, you find a way to keep the partnership going.

The market for these GP-led secondary transactions is booming, and new, highly specialized players are emerging to meet the demand. The lead investor here, Painswick Capital, is a prime example. Founded in 2024 by AEA Investors veteran John L. Garcia, Painswick focuses exclusively on the continuation vehicle market, which Garcia views not as a secondary play, but as a direct extension of primary private equity investing. The firm’s successful raise of a $1.5 billion inaugural fund—double its initial target—signals immense institutional confidence in this specialized strategy.

Fueling an Engine of Modern Commerce

At the heart of this deal is Core States Group, an industry powerhouse founded in 1999. With 650 employees across 24 offices, the firm is a critical, though often unseen, partner to the world’s biggest brands. It specializes in designing and managing large-scale, multisite renovation and remodel programs. When a major retailer decides to overhaul its stores for an omnichannel future, or a logistics giant needs to optimize its distribution network, Core States Group is often the one executing the vision on the ground.

This makes the company a key enabler of the very trends shaping the 2026 landscape: the de-risking of supply chains, the evolution of physical retail, and the relentless drive for operational efficiency. The firm’s success since its initial partnership with Wacona—marked by expanded blue-chip client relationships and strategic acquisitions—made it a clear candidate for a continuation vehicle. It is a quintessential “crown jewel” asset.

Dave Dugan, President and CEO of Core States Group, commented on the continued partnership, stating, “With Wacona, we have a partner who fully supports our core values and strategic vision. The investment from our new capital partners establishes a strong foundation from which we will continue to grow the business with new and existing clients, as well as through acquisition.” This new capital infusion is not just about maintenance; it’s about strategic acceleration, empowering the firm to deepen its capabilities and expand its reach at a time when its services are more critical than ever.

The Specialist Investor Enters the Arena

The involvement of Painswick Capital as the lead investor is perhaps the most forward-looking aspect of this transaction. The firm represents a new breed of capital provider that brings deep underwriting experience specifically to the CV space. Rather than being generalists, they are experts in evaluating assets that have already been seasoned within a private equity environment. Their mandate is to back proven management teams and sponsors to achieve a “second bite of the apple.”

James Powers, Partner at Painswick Capital, highlighted the firm’s conviction in the asset: “Core States Group is a trusted partner to leading companies across a broad range of industries and is well positioned to expand its capabilities, customer relationships, and geographic reach.” This is not a speculative bet; it's an investment in a known quantity with a clear path for further value creation.

Painswick’s recent activity, including co-leading a CV for Impel Company and investing in a fund for QDOBA Restaurant Corporation, demonstrates its rapid deployment of capital into high-quality, mid-market companies. Their participation, alongside a syndicate of other institutional investors, lends significant third-party validation to Wacona’s assessment of Core States Group’s potential.

The sophistication of the deal is further reflected in the advisors involved. Wacona was guided by Jefferies on finance and Kirkland & Ellis on legal matters, while Painswick was advised by Proskauer Rose. These firms are at the forefront of structuring these complex transactions, a sign of the market's increasing maturity and institutionalization.

Ultimately, this $210 million deal is a microcosm of a larger shift in private equity. It’s a move away from rigid timelines and toward more flexible, strategic ownership. By aligning the interests of the general partner, the management team, and both new and old investors, the continuation vehicle provides a robust framework for building more resilient, valuable companies capable of navigating and thriving in a world of constant disruption.