Secondaries

GP-Led Secondaries: A Practical LP Decision Framework for Continuation Vehicles

Continuation funds now account for the majority of GP-led secondary volume. Most LPs still treat the roll-versus-sell decision as a one-off scramble. Here is the framework serious allocators are building instead.

Allocator Desk Research · Editorial · May 2026 · 9 min read

When a GP calls to say a trophy asset is moving into a continuation vehicle, the LP has roughly four to six weeks to make three decisions at once: sell at the stated price, roll on status quo terms, or roll into new economics. The shortlist of allocators who do this well are not smarter. They have a repeatable framework, the documents already organized, and a written record of what they decided last time and why.

This is a working playbook for that decision, written for institutional LPs who see at least a handful of continuation vehicle (CV) opportunities each year.

Why this question keeps getting harder

GP-led secondaries, and single-asset continuation vehicles in particular, have moved from niche liquidity solution to a core part of how private equity returns capital. Industry trackers have reported continuation vehicles representing roughly half of all GP-led volume in recent years, with single-asset CVs taking the largest share. (For market context, see the Jefferies Global Secondary Market Review and Lazard Secondary Market Reports.)

The practical implication for LPs: this is no longer an exception process. It is a recurring workflow that deserves the same rigor as a new fund commitment.

The five-question framework

Before engaging a third-party advisor or running the numbers, force the team to answer these five questions in writing. The discipline of writing them down is most of the value.

1. What is the implied entry multiple for new money?

The stated NAV is not the entry price. The entry price is NAV plus transaction costs, plus any catch-up on crystallized carry, minus any rollover discount. Compute the implied multiple on invested capital for a hypothetical new investor in the CV. If that number is materially above what you would underwrite for a fresh primary commitment to a similar asset, the roll needs to clear a higher bar.

2. Is the carry being reset, and at what hurdle?

The single most consequential economic term is whether crystallized carry is being paid out and a new carry waterfall starts. A reset to a fresh 8 percent preferred return with 20 percent carry is structurally different from a continuation of the original waterfall. Document it.

3. What is the GP actually rolling?

A strong signal is the percentage of crystallized GP carry that is being rolled into the CV alongside LPs. The ILPA continuation funds guidance is explicit that this should be disclosed and meaningful. (See ILPA Continuation Funds Guidance.) "Most" is not a number. Get the number.

4. Was the price tested?

A fairness opinion is not a price test. A competitive process with multiple lead bidders is. Ask for the bid range, the number of bidders that submitted, and whether the lead buyer was anchored before the broader process. If the GP is also the auction designer, that is worth noting in your file.

5. What does our own attribution say about this asset?

If you have held the underlying fund for several years, you almost certainly have your own marks, your own meeting notes, and your own view on management quality. Pull them. The institutional memory you already own is more valuable than any third-party report.

The roll-versus-sell decision tree

Once the five questions are answered, the decision usually collapses into one of four buckets:

Sell at par or near par when the implied entry multiple is rich, the carry is being fully reset, and your own conviction on the asset has softened. Take the liquidity, recycle into your primary program.

Roll on status quo when the GP offers it and the original economics are demonstrably better than the new CV terms. This is rarer than it used to be because GPs increasingly require the new terms.

Roll on new terms when conviction on the asset is high, the price test was credible, and the GP rollover is meaningful. Treat this as a new commitment and run it through your IC accordingly.

Sell at a discount and exit the relationship when the process itself raised governance concerns. This is a legitimate outcome and worth saying out loud.

What to keep in the file

For every continuation vehicle you evaluate, archive these eight items in a single folder:

1. The transaction summary memo from the GP 2. The fairness opinion (full, not the cover page) 3. The bid range and process summary, in writing 4. Your own historical marks and meeting notes on the asset 5. The LPAC minutes or your LPAC representative readout 6. The new LPA redline against the original fund 7. The carry waterfall comparison, in a table 8. Your written decision rationale, dated and signed by the recommending analyst

Two years from now, when the CV is either compounding or impaired, this folder is what lets your team learn from the decision. Without it, every CV opportunity feels like the first one.

Where this fits in your operating model

The LPs who handle this well share three operational habits.

They treat continuation vehicles as a known recurring event in their pipeline management, not a fire drill. They maintain a decision journal so that the rationale survives team turnover. And they have a repeatable IC process that handles a CV the same way it handles a new commitment, with the same documentation discipline.

None of this requires more headcount. It requires that the workflow exists before the call from the GP, not after.

<aside><strong>THE TAKEAWAY</strong><p>A continuation vehicle decision made under time pressure with no framework is indistinguishable from a coin flip. The framework does not have to be elegant. It has to exist, in writing, before you need it.</p></aside>

Topics

GP-led secondaries
continuation vehicles
LP decision framework
private equity
secondary market
ILPA
fund liquidity
institutional investors