Secondaries
Continuation Vehicle (CV)
A new fund vehicle created to acquire one or more assets from an existing fund, allowing the GP to continue managing them with fresh capital and a new term.
Continuation vehicles can be single-asset or multi-asset. Single-asset CVs concentrate risk and require especially careful diligence. The transaction typically resets management fees and carry on the rolled assets.
Key diligence items include: who priced the asset, who else bid, what the original fund's LPs receive, what the rolling LPs commit to, GP commitment percentage, and terms compared to a new primary fund.