Willow Tree Credit Partners has closed a $730m (£542.7m) private credit continuation vehicle led by HarbourVest Partners.

The Willow Tree Fund II-CV comprises a portfolio of approximately 130 securities, primarily first-lien loans and sponsor-backed companies, from Willow Tree Fund II, a late 2020/early 2021 vintage fund.

“We believe this continuation vehicle reflects the strength and consistency of the portfolio we’ve built in Fund II and our commitment to delivering solutions that serve our limited partners at every stage of a fund’s life,” said Tim Lower, founder and chief executive of Willow Tree. “We saw an opportunity to provide our existing investors with optionality for liquidity while continuing to steward a portfolio we know deeply.”

Read more: Veld Capital closes asset-backed credit continuation vehicle at €355m

Headquartered in New York, Willow Tree is a middle-market private credit firm, while HarbourVest is a global private markets firm with $160bn of assets under management.

Evercore served as financial adviser on the transaction. Morgan Lewis served as legal counsel to Willow Tree, while Kirkland & Ellis served as legal counsel to HarbourVest.

The deal comes as the credit secondaries market has grown rapidly, particularly in the GP-led continuation vehicle segment.

A survey by Houlihan Lokey found in March that private markets secondary volumes are set to surpass $225bn (£169.5bn) in 2026, driven by continued slow distributions and growth in non-buyout strategies such as infrastructure and private credit.

Read more: Sycamore Tree Capital launches credit secondaries investment platform