Painswick Capital views single-asset continuation vehicles as a PE business and has built its firm around that thesis, founder John Garcia and partner James Powers tell Secondaries Investor.

Most new secondaries entrants have been snapping up marquee hires with experience in the sub-asset class. Painswick Capital, by contrast, has taken a different approach.

Founder John Garcia views the single-asset continuation fund market as an extension of the private equity market he's been operating within for over 25 years, he tells Secondaries Investor.

Garcia established Painswick in 2024 after stepping back as CEO of AEA Investors in 2019. Garcia remains chairman at the New York-headquartered private investment firm, which has $18 billion in assets under management. Last August, his new shop raised approximately $1.5 billion for Painswick Capital Fund I, ahead of its $750 million target, Secondaries Investor data shows.

"I didn't view [single-asset CVs] as a secondary business. I knew it as a private equity business where all I care about is the quality of the asset, nothing else," Garcia says. "The rest is technology around how you buy and sell things... which is almost irrelevant to returns. That will get you nothing unless you have a really great company."

Of Painswick's six investment professionals, five - including John and partner James Powers - were all previously with AEA. Powers spent over 16 years with the firm before joining Garcia in launching Painswick. Its head of finance and chief commercial officer, Joe Testani, joined last year from private equity shop SFW Capital Partners.

The firm's sixth investment professional has just been hired, joining as an associate after two years' experience of M&A investment banking, Powers tells Secondaries Investor.

CV strategy the 'holy grail'

The private equity asset class matured over the course of Garcia's tenure at AEA, allowing managers to execute at scale - an important development for institutional investors, Garcia says.

A by-product of that development is that the average median private equity return is around 2x multiple of invested capital gross of fees, Garcia adds. On top of that, firms need large headcounts to source and compete in the asset class.

Regardless of this maturation, the private equity strategy still has risk. Firms have to "pay a big price with the control premium, and that all felt like... it was a hard way to make money", Garcia says. "It's very clear to see why the industry's gone where it's gone. But for me as an individual now, or a small family, I don't need to participate in that."

While he was considering next steps, the private equity industry was facing a crunch. Following interest rate hikes, private equity firms were sitting with assets bought and levered at 2019 and 2020 highs.

"The consequence of that is time," Garcia explains. "Time will fix those problems, but it takes three, four, five years."

In the meantime, LPs with heavy PE exposure have suffered from a lack of liquidity, complicating their private markets commitments and investments.

Within this context, single-asset continuation vehicles have boomed - comprising 53 percent of the $116 billion of GP-led volume seen in 2025, according to Lazard's year-end 2025 report. The entire GP-led market reached $63 billion in 2021.

Garcia sees this segment of the market "as a primary direct minority private equity investment, because it's one company". Compared with private equity investing, these deals remove the risk of something going wrong in the first year of private equity ownership, ultimately leading to stronger and more reliable returns, he explains.

"If I invest with good sponsors, with good companies... I can partner with them and not get involved with the sourcing or anything else, just become their partners ... I should be able to create a portfolio that has 12, 13, 14 companies that [execute business plans] quicker, they exit quicker, they have better returns with less risk," Garcia says. "That's the holy grail for any asset class, but especially in private equity."

Though Painswick Capital is independent of AEA Investors, there is a relationship between the two firms. Firstly, some AEA partners are investors in Painswick's debut vehicle alongside Garcia. Furthermore, some AEA LPs backed the vehicle alongside brand-new investor relationships, Garcia explains.

Painswick is, however, "a separate firm, separate investment committee, separate review process". While the manager can call on the industry expertise of AEA, it has a wall that goes one way, Garcia adds.

Leaning on prior experience

Painswick Capital is "on our sixth deal", with its inaugural fund around 40 percent deployed, Garcia says. Furthermore, it has "line of sight to another couple of deals that we should have definitive documentation of in the next few months," he adds.

It took a lead investor role in Pike Street Capital's $199 million CV for wastewater treatment-focused Impel Company; an investor role in PAI Partners' CV for ice cream company Froneri, which was understood to be around €2 billion-€3 billion in size; an investor role in Butterfly's $527 million CV for Mexican restaurant Qdoba; and a participating investor role in Astorg's €1.4 billion CV for testing, inspection and certification services firm Normec.

While Painswick Capital has sweet spots for investments, it does have some flexibility in the investments it can back. "We just want the best deals possible", Powers tells Secondaries Investor. "We know we're going to be judged on our absolute returns relative to any other alternative."

With that in mind, the firm has the ability to both lead and co-lead deals, though it prefers the former, Powers says. Painswick invests in US and European opportunities where robust CV markets have formed and where AEA itself has its roots.

The firm is "naturally" focused on the mid-market, given the team's experience at AEA, Powers adds. However, it has the remit to invest above or below this market where "some remarkable companies" can be found.

Company size, ultimately, is a consideration for the firm, Powers explains. At the lower end of the market, there can be a "fragility risk", given that Painswick is not in control. At the larger end, exits become a core question given the buyer universe becomes finite.

Lastly, the Painswick team continues with the sector focus individuals have developed over their careers.

"We all come from private equity," Powers says, adding that the team has honed its experience in sectors like industrials, services, healthcare and consumer.

"We really view the world as a collection of, I don't know, 50-70 subsectors, to be honest with you, but we can play across them because we're bringing a private equity toolkit and experience. At the point the market's at today, it's important to be flexible enough to find where the best opportunity is."

When the CV market "really scales, which it will", then players can develop "sub-pockets where you specialise", Powers adds.

A PE approach to pricing

The firm sees its differentiating factor in Garcia's view that single-asset continuation funds are fundamentally private equity transactions.

When asked how Painswick approaches pricing for single-asset CVs, Garcia caveats by remarking on valuation practices more broadly.

The process of setting a net asset value for private equity firms "is complicated", Garcia says. "It's much stickier on the way down than it is on the way up for private equity, but for good reasons."

Part of the skill set required for these deals is "to understand what fair value is to that NAV and to understand what you should pay for the asset".

With this in mind, Painswick's approach to pricing, Garcia adds, comes from the private equity toolkit. "It's the same way that the sponsor did it - so I don't think we're going to come out with a huge discrepancy - but we're not buying control."

For that reason, the firm doesn't expect to pay a control premium, Garcia says.

However, the firm is seeking "win-win-win deals" for the GP, new investors and existing LPs, Powers adds.

"Those deals tend to have really attractive [multiples of invested capital] that are being crystallised by the CV, so the premise of these deals is: the GP is presenting the value that's fair and that's right."

There isn't, therefore, a huge discrepancy between the NAV and the ultimate pricing Painswick offers, Garcia says.

"You're not going to pay more for something that's got more risk. You tend to pay more for things that have less risk. No change [of] sponsor, no change of value creation plan, no change of M&A programme, no change in management team. So that's the key, not to have any change."

Published: June 24, 2026

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