Meaning and transaction use
An SEC-filed fund prospectus lists continuation funds, tender offers, strip sales and spin-outs as forms of GP-led transactions. [S1]
Another SEC filing identifies conflicts where a continuation-fund sponsor acts for both the selling legacy fund and the buying continuation fund. [S2]
Proposed control method: document valuation, conflicts, alternatives, allocation, elections, expenses and approvals in an investor-level audit trail.
Worked example
Illustrative election only. Assume an eligible interest value of 5.0 million, a 60% cash election and allocated costs equal to 1% of gross cash proceeds.
Scroll the table horizontally to view all columns.
| Measure | Calculation | Result |
|---|---|---|
| Gross cash election | 5.0 x 60% | 3.0m |
| Rollover value | 5.0 x 40% | 2.0m |
| Allocated cash costs | 3.0 x 1% | 0.03m |
| Net cash proceeds | 3.0 - 0.03 | 2.97m |
The illustrative investor receives 2.97 million net cash and rolls 2.0 million before tax or other adjustments.
Proposed transaction review process
Set rationale
Document liquidity, duration, capital and asset strategy.
Manage conflicts
Establish valuation, approvals, advice and disclosure controls.
Run elections
Provide terms, alternatives, deadlines and investor-level calculations.
Close and report
Allocate interests, costs, carry, proceeds and rollover positions.
Evidence checklist
Rationale
Asset plan, alternatives, timing and continuation thesis.
Valuation
Financials, diligence, bids, fairness or valuation work and assumptions.
Conflicts
Disclosures, committee review, consents and adviser roles.
Elections
Investor notices, responses, allocations, costs and closing statements.
Decision framework
| Situation | Proposed action |
|---|---|
| Price evidence is limited | Expand market testing or independent valuation support. |
| An investor needs liquidity | Apply the documented cash-election route and allocation rules. |
| Rolling and selling interests conflict | Use the approved conflicts process and complete disclosure. |
| Follow-on capital is required | State commitments, dilution and funding consequences clearly. |
Common errors to check
- Presenting rollover as economically identical to cash.
- Ignoring buyer-seller conflicts.
- Allocating expenses without a documented basis.
- Using an election deadline without complete information.
Build the GP-led decision file
Bring the asset case, valuation, conflict controls and election mechanics to a GP-led review. Reconcile investor choices and closing allocations.
Discuss the transactionPrimary references and editorial scope
- SEC filing: GP-led secondary transaction forms
Examples including continuation funds, tender offers, strip sales and spin-outs. Reference checked 17 September 2026. - SEC filing: Continuation-fund conflicts
Example conflicts between legacy fund, continuation fund, rolling investors and new investors. Reference checked 17 September 2026.
General transaction education using public United States filings. Figures are hypothetical. Fund documents, fiduciary duties, regulation, 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.
