Operating a continuation fund
Elections, transfers, a new vehicle and two groups of investors.
What are the operational steps in a continuation fund transaction?
Setting up the new vehicle and its documents, running the election process for existing LPs (sell or roll), onboarding new investors, transferring assets at the agreed price, settling cash to selling LPs, carrying rolled interests across, and reporting to both investor groups.
Elections
Track each LP's election and deadline; default elections must follow the documents.
Transfer and settlement
Asset transfer at the transaction price, payments to sellers, and rolled interests credited in the new vehicle.
New economics
The continuation vehicle has its own waterfall, often with a crystallised carry event in the original fund.
Questions
Can FUN/D run both vehicles?
Yes, with a consolidated view of the assets.
Related reading
Continuation fund · Software for secondaries and continuation funds · LPAC
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