Continuation vehicles — the GP-led secondary structure — are the most important structural innovation in PE since the 2009 fund-vehicle reforms. They let a GP hold a high-conviction asset past the original fund's life, with new LP capital and reset economics. Done right, they extend the runway on the best assets. Done badly, they are conflicted and lawsuit-prone.
How a CV is structured
The existing GP forms a new fund (the continuation vehicle). The CV buys one or a few assets from the original fund at an agreed price. Existing LPs choose: cash out at the agreed price, or roll over into the CV with reset terms (often a fresh hurdle and a new carry crystallisation). New LPs (typically secondaries-focused funds) provide most of the CV's capital. Independent valuation and LPAC consent are universally required.
The CV is run by the same GP team that managed the original fund's investment. The thesis is that they know the asset best and the additional 3–5 year hold can compound value at a different rate than a forced sale would.
The three core conflicts
Pricing: the GP sits on both sides of the trade — selling for the old fund, buying for the new. Independent valuation, LPAC consent, and a third-party fairness opinion are the standard safeguards. LP fairness: existing LPs who cash out and existing LPs who roll over are taking different bets on the same assets. The 'status quo' option (rolling on the same terms) is increasingly mandated. GP economics: the GP can crystallise carry on the original fund's exit price, then re-earn carry on the CV. ILPA's 2023 guidance on CVs sets norms for how this should be structured.
The 2024–2025 CV market
CVs grew from a niche $5B market in 2018 to over $100B in 2025, driven by the same exit drought that grew the LP-led secondary market. Single-asset CVs — concentrated bets on one trophy asset — now account for a meaningful share of volume. Independent fairness opinion providers (Houlihan Lokey, Lazard) have built dedicated CV practices. The market is now mature enough that LPs treat well-structured CVs as a normal liquidity option, not an exotic event.