The private equity trend of continuation vehicles (CVs)—a strategy soaring in popularity—is in the spotlight due to a high-profile failure involving United Site Services (USS), a portable toilet rental company.
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Major financial institutions, including Fortress Investment Group, Ares Management Corp. (NYSE:ARES), and Blackstone Inc. (NYSE:BX), are poised to lose a combined $1.4 billion on an investment in USS that was channeled through a continuation vehicle, according to sources cited by Bloomberg.
The Failed Continuation Vehicle
What Happened: Platinum Equity created the continuation vehicle in 2021 specifically to move USS from one of its older private equity funds into a new fund.
The Valuation: The maneuver valued USS at a hefty $4 billion.
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The Purpose: The CV served as an exit alternative for investors in the original fund, allowing them to cash out approximately $2.6 billion without an outright sale of the company. It is an increasingly common strategy to “monetize assets” amid slow deal-making and IPO markets.
The Risk: The new CV was a single-asset fund, placing a highly concentrated bet on the success of USS.
Why the CV Unraveled
Despite initial optimism about capitalizing on a post-COVID return to events and construction, USS struggled.
Higher interest rates hurt both the construction industry (a key customer for portable toilets) and USS’s own balance sheet, where debt servicing consumed the company's cash.
The company also struggled to integrate numerous prior acquisitions.
As a result, Platinum is preparing to hand control of the company to lenders (including Clearlake Capital and Searchlight Capital Partners), likely resulting in a total loss for the investors in the continuation vehicle.
The sources noted that Platinum has not made a final decision on the fate of USS, and the outcome could change.
Highlighting the “Hazards”
This situation highlights the hazards of continuation vehicles, a strategy that accounted for nearly a fifth of all private asset exits in the first half of 2025, according to a Jefferies Financial Group analysis cited by Bloomberg.
While CVs offer a flexible way for private equity firms to hold onto promising assets longer, the likely catastrophic outcome for USS demonstrates that they can also leave new investors holding a concentrated, illiquid, and ultimately failing investment.
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