Meaning and transaction use
An SEC-filed prospectus identifies continuation funds as a form of GP-led secondary opportunity. [S1]
Another SEC filing describes conflicts created when the sponsor acts for both the selling legacy fund and the buying continuation fund. [S2]
Proposed control method: document rationale, alternatives, valuation, conflicts, investor elections, follow-on capital and allocation in one decision file.
Worked example
Illustrative funding bridge only. Assume transfer value of 120.0 million, costs of 4.0 million, follow-on reserve of 16.0 million and new debt of 40.0 million.
Scroll the table horizontally to view all columns.
| Measure | Calculation | Result |
|---|---|---|
| Gross funding need | 120.0 + 4.0 + 16.0 | 140.0m |
| New debt | Given | 40.0m |
| Continuation equity requirement | 140.0 - 40.0 | 100.0m |
| Debt share of gross funding | 40.0 / 140.0 | 28.6% |
The illustrative vehicle requires 100.0 million of equity and 40.0 million of debt.
Proposed transaction review process
Set the case
Document asset thesis, duration, capital needs and alternatives.
Manage conflicts
Establish valuation, governance, approvals and disclosure controls.
Raise and elect
Run investor diligence, commitments and legacy-investor elections.
Close and govern
Transfer assets, allocate costs, establish reporting and execute the plan.
Evidence checklist
Asset case
Performance, forecast, value plan and follow-on needs.
Valuation
Diligence, bids, market evidence and independent analysis.
Conflicts
Disclosures, committee review, consents and adviser roles.
Funding
Commitments, debt, elections, allocations and closing statements.
Decision framework
| Situation | Proposed action |
|---|---|
| The asset thesis is unproven | Improve evidence or retain another route. |
| Valuation evidence is limited | Expand market testing and independent review. |
| Legacy investors have different needs | Apply documented cash and rollover choices. |
| Follow-on capital is uncertain | Secure commitments or resize the plan before closing. |
Common errors to check
- Using fund-life extension as the sole rationale.
- Ignoring buyer-seller conflicts.
- Treating rollover as cash-equivalent.
- Underfunding follow-on capital and costs.
Build the continuation-vehicle case
Bring the asset plan, valuation, conflict controls and funding structure to a continuation review. Reconcile investor choices and capital needs.
Discuss the transactionPrimary references and editorial scope
- SEC filing: Continuation funds as GP-led secondaries
Example treatment of continuation funds as GP-led secondary opportunities. Reference checked 17 September 2026. - SEC filing: Continuation-fund conflicts
Example sponsor, legacy-fund, continuation-fund and investor conflicts. Reference checked 17 September 2026.
General transaction education using public United States filings. Figures are hypothetical. Fund documents, regulation, fiduciary duties, tax and transaction terms govern actual outcomes.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
