About Broadtree Partners

• Founded: 2016

• Headquarters: New York, United States

• Strategy: Lower middle-market buyout, business services

• Thesis: Partnering with founder-led service businesses to professionalize operations and accelerate growth through buy-and-build strategies

• Track record: Fund I raised $150m in 2016; Fund II closed at $425m in 2021

• Leadership: Founded by Michael Rubin and David Crosson

Broadtree Partners closed a $240m multi-asset continuation fund with lead investment from Adams Street Partners. The vehicle provides liquidity to existing limited partners while allowing others to roll equity forward in a portfolio of service businesses held beyond the original fund term. The firm did not disclose how many portfolio companies are included in the continuation vehicle or which fund the assets originated from.

Continuation funds have become a standard recapitalization tool for middle-market GPs holding winners past their initial hold periods, but the frequency of multi-asset vehicles—rather than single-company secondaries—signals either broad portfolio strength or delayed exit timelines across multiple positions. Broadtree's Fund I is now eight years old, approaching the outer edge of typical fund life even with extensions. A $240m continuation on a $150m debut fund suggests the rolled assets have appreciated significantly, though the lack of disclosed exit velocity raises questions about whether these businesses have reached natural exit points or simply lack M&A buyers at current valuations. Comparable recent continuation funds in the lower middle market include Littlejohn & Co.'s $300m single-asset continuation for a healthcare services portfolio company in late 2023 and Gryphon Investors' $450m multi-asset vehicle announced in early 2024.

The Adams Street anchor is notable—continuation funds typically require a credible lead to price the transaction and validate the carry strip for rolling LPs. What matters now is deployment pace for Fund II and whether Broadtree can exit continuation-fund assets within a reasonable secondary hold period, typically 3–5 years. If exits drag into year six or seven, the continuation vehicle starts to look less like a bridge to liquidity and more like an extension by another name, which would complicate the narrative for Fund III whenever it enters the market.

Source: AltAssets