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Last week, Vista Equity Partners tapped Goldman Sachs to arrange a roughly $1 billion collateralized fund obligation (CFO) backed by stakes in its private capital funds. It's the latest deal in a growing trend where sponsors are leveraging bespoke securitizations to raise cash backed by their illiquid portfolios.

These securitizations rely on cash flows from fund interests in buyout, credit, and other private strategies, sliced into tranches, typically with a first-loss equity position retained by the sponsor.

For GPs, CFOs can be used as a fundraising tool for new funds and can provide liquidity for existing fund interests.

According to credit outlet Octus, the large size of the transactions makes them a cost-efficient fundraising instrument.

“You tend not to do regular fund financing at the scale of the CFOs,” said a source cited by the outlet who has worked on several CFOs this year.

“The ability to blend the underlying secondary positions into a large pool and raise capital against it means that you can get a better cost of funding than you would otherwise have.”

The instruments are built—and rated—based on an assortment of portfolio construction considerations: strategy mix, vintage, manager dispersion, and geographic spread.

Fitch’s criteria, for example, discourage above 25 percent exposure to any single GP or 10 percent to any single fund and apply additional stress to riskier strategies, younger vintages, and emerging-market concentrations.

The number of inbound pitches and active mandates points toward a trend with some staying power, rather than an isolated jump based on temporary market conditions.

“Not a week goes by for me without getting a new CFO proposal, so I expect the market to continue to grow,” said Greg Fayvilevich, global head of Fitch Ratings’ fund and asset management group, in an interview with Bloomberg.

On the demand side, appetite for such securitizations has also hit an inflection point.

Insurers are the primary buyers, for whom CFOs offer an opportunity to add private capital exposure, which is attractive relative to the low yields available in public markets.

Now, a pair of recent regulatory changes has made it easier for them to allocate cash to these instruments.

In January, new capital rules from The National Association of Insurance Commissioners’ took effect that clarified treatment for these securities, allowing carriers to grow their exposure.

At the same time, UK-based insurance firms, historically cut off from assets like collateralized loan obligations (of which the CFO is a variant), can now purchase certain types of CFOs following reforms to the UK's Solvency II guidelines.

Previously, the Solvency II framework rewarded insurers for holding assets with “fixed” cash flows that closely match their liabilities, effectively barring most conventional securitizations. Under the new reforms, language was loosened to also include assets with “predictable” cash flows.

Because a CFO securitizes illiquid fund interests, where cash flows are tied to irregular events like exits or dividends, the traditional CFO still doesn't meet the criteria. But, reports Octus, "several asset managers are working on CFOs designed to be capital efficient for U.K. insurance companies."

“There is a lot of work being done to create structures that would be matching adjustment-eligible,” Pierre Maugüé, partner at Debevoise & Plimpton in London, tells Octus. “It’s the big project of 2025.”

• Advent International and TA Associates have hired Evercore to advise on the possible sale of Conservice, a utility management and billing company, which could be valued between $4.5 billion and $5 billion, per Reuters.

• Partners Group agreed to sell its 24.9% stake in Apex Logistics, a Singapore-based air freight provider, for $1.1 billion to majority shareholder Kuehne+Nagel.

• Alkermes (NYSE: ALKS) agreed to acquire Avadel Pharmaceuticals (Nasdaq: AVDL), a commercial-stage biopharmaceutical company, for up to $2.1 billion.

• Apollo Global Management (NYSE: APO) has hired UBS to explore the sale of Heritage Grocers Group, a Hispanic grocery chain, which could be valued at around $1.5 billion, per Reuters.

• JERA agreed to acquire interests in the South Mansfield gas field, US shale gas assets in Louisiana's Haynesville Shale basin, for $1.5 billion from Williams (NYSE: WMB) and GEP Haynesville II, a joint venture between GeoSouthern Energy and Blackstone.

• Ipsen agreed to acquire ImCheck Therapeutics, a private French biotechnology company focused on next-generation immuno-oncology therapies, from EQT Life Sciences for up to EUR 1 billion.

• Goldman Sachs (NYSE: GS) is nearing a deal to acquire a majority stake in Excel Sports Management, a talent agency, from Shamrock Capital at a $1 billion valuation, per the Financial Times.

• Cinven is among suitors weighing bids for Pure Cremation, a UK funeral provider backed by Epiris, in a deal expected to value the company at more than £500 million, per Sky News.

• Sixth Street made a $350 million strategic growth investment in CR Fitness Holdings, a Crunch Fitness franchisee and portfolio company of North Castle Partners.

• Mainsail Partners invested $35 million in FieldFlo, a project and safety management software provider for specialty subcontractors.

• Vistra Corp. (NYSE: VST) acquired a 2.6 gigawatt natural gas-fired power generation portfolio from Lotus Infrastructure Partners.

• Curewell Capital acquired a majority stake in Wilmington PharmaTech, a U.S.-based specialty CRDMO for custom small molecule API development and manufacturing.

• Chroma Color, an Arsenal Capital portfolio company, acquired Ferco Color, a Chino, California-based maker of colorants, additives, and specialty compounds.

• Ivy Technology, a portfolio company of Staple Street Capital, acquired PureWrx, a provider of certified pre-owned equipment programs for technology OEMs.

• FFL Partners invested in Janus RX, a Montgomery, Alabama-based behavioral pharmacy focused on long-term care for patients with serious mental illnesses.

• SkyKnight Capital invested in Force Electrical Services, a provider of electrical distribution and transmission infrastructure services.

• H.I.G. Capital acquired a majority stake in A.L.A., an Italian provider of logistics and distribution services to the aerospace and defense industry.

• OuterBox, a portfolio company of WILsquare Capital, acquired Accelerated Digital Media, a performance-driven digital marketing agency for healthcare and eCommerce clients.

• Frontline Healthcare Partners acquired a controlling interest in Integracare, a Toronto, Ontario-based private-pay home care company.

• Learning Pool, a portfolio company of Marlin Equity Partners, acquired Elucidat, a cloud-based authoring platform, from YFM Equity Partners.

• BevLogic, a portfolio company of Performant Capital, acquired select beverage alcohol compliance technology assets, regulatory compliance solutions for beverage alcohol producers, from Vista Equity Partners-backed Avalara.

• Forefront Dermatology, a Partners Group portfolio company, acquired SkinCare MT, a Bozeman, Montana-based dermatology group.

Tech, Vertical SaaS, & Misc. Enterprise

• Crusoe, an AI data center startup, raised $1.375 billion in Series E funding, co-led by Valor Equity Partners and Mubadala Capital, with participation from Nvidia, Fidelity Management, Founders Fund, Altimeter, and Salesforce Ventures.

• Chainguard, a cybersecurity startup for open-source software, raised $280 million in growth financing, led by General Catalyst's Customer Value Fund.

• Roller, an Austin, TX-based venue management platform for leisure and attractions, raised $50 million in growth capital co-led by Insight Partners and J.P. Morgan.

• Starbridge, an AI-powered govtech platform for sales intelligence, raised $42 million in Series A funding led by Craft Ventures, with participation from Owl Ventures, Commonweal Ventures, and Autotech Ventures.

• Sumble, a sales intelligence platform, raised $38.5 million in Seed and Series A funding, co-led by Canaan Partners and Coatue, with participation from Square Peg Capital, Zetta Venture Partners, Bloomberg Beta, and AIX Ventures.

• Riff, an Oslo-based vibe coding platform, raised $16 million in Series A funding led by Northzone, with participation from Skyfall Ventures, Maki.vc, Sondo Capital, and Global Founders Capital.

• Darwin AI, a company enabling governments to safely deploy AI at scale, raised $15 million in Series A funding led by Insight Partners, with participation from UpWest and Resolute Ventures.

• Moonshot AI, an AI platform for self-optimizing e-commerce websites, raised $10 million in Seed funding led by Mighty Capital, with participation from Oceans Ventures, Uncorrelated, Garuda Ventures, and Almaz Capital.

Fintech

• Polymarket, a crypto-based prediction market, is in early discussions with investors to raise new funding at a valuation between $12 billion and $15 billion.

• GradBridge, a fintech for second-look private student lending, raised $20 million in Series A funding led by Acorn Investment Partners.

• Ava, a credit-building app for consumers, raised $15.5 million in seed funding led by Greylock, with participation from Transform VC, Firebolt, Twine Ventures, and Sure Ventures.

• Clerq, a payments platform for high-ticket transactions, raised $12 million in Series A funding, led by 645 Ventures, with participation from FirstMark Capital, Fika Ventures, Commerce Ventures, and Dash Fund.

• Natural, an agentic payments infrastructure company, raised $9.8 million in seed funding, co-led by Abstract and Human Capital, with participation from Forerunner Ventures, Terrain, Restive Ventures, and Genius Ventures.

Consumer & Media

• ShopMy, a commerce infrastructure company, raised $70 million in new funding at a $1.5 billion valuation led by Avenir, with participation from Bain Capital Ventures, Bessemer Venture Partners, and Menlo Ventures.

• GammaTime, a micro-drama streaming platform, raised $14 million in Seed funding co-led by vgames and Pitango, with participation from Traverse Ventures.

• Wolf Games, a generative entertainment company, raised $9 million in Series A funding led by Main Street Advisors.

Healthcare

• Electra Therapeutics, a clinical stage biotechnology company, raised $183 million in Series C funding co-led by Nextech and EQT Life Sciences, with participation from Sanofi, HBM Healthcare Investments, Mubadala Capital, OrbiMed, Blue Owl Capital, RA Capital Management, Redmile Group, New Leaf Venture Partners, Westlake BioPartners, and Cormorant Asset Management.

• Valthos, a New York-based biosecurity software startup, raised $30 million in seed funding co-led by OpenAI Startup Fund, Founders Fund, and Lux Capital.

• VitriVax, a vaccine formulation company, raised $17.25 million in Series B funding co-led by Adjuvant Capital and RA Capital Management.

• Generation Lab, a longevity science company, raised $11 million in seed funding led by Accel, with participation from Samsung Next and Zone2.

• Ampa, a Palo Alto, CA-based neurotechnology company, raised $8.5 million in Pre-A funding led by Nexus NeuroTech Ventures, with participation from Satori Capital, Morningside Ventures, and Continuum Health Ventures.

Industrials, Greentech, & Other

• Mondra, an AI climate tech platform for food resilience, raised £10 million in Series A funding, co-led by AlbionVC and Planet A Ventures, with participation from Swisscom, PeakBridge, Ponderosa Ventures, and Green Circle Foodtech Ventures.

• WSense, an Italian ocean tech firm developing subsea Wi-Fi for underwater IoT, raised €10 million in pre-Series B funding co-led by Indico Capital Partners and SIMEST, with participation from CDP Venture Capital SGR, Blue Ocean by SWEN, RunwayFBU, Axon Partners Group, Fincantieri, and Rypples.

• A16z is hoping to raise $10 billion across four new funds, including a $6 billion growth fund, a $1 billion American Dynamism fund, and two $1.5 billion funds focused on AI apps and infrastructure, per the FT.

• Dawson Partners raised $7.7 billion for its sixth flagship fund focused on portfolio-finance deals.

• Qualitas Energy is hoping to raise €3.25 billion for its sixth fund focused on European renewables.

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