Introduction
A private capital advisory (PCA) banker on a continuation vehicle (CV) produces three numbers, each relied on by people who were not in the room when it was made. The first is a value range, formed before any bids, that tells the general partner (GP) and the limited partner advisory committee (LPAC) what a credible price looks like. The second is the lead investor's price, the output of a bid process the advisor designs. The third is the allocation of the remaining equity among syndicate investors. The continuation vehicle process places each on the timeline. Because the advisor is hired by the GP, paid mostly at closing, and expected to act for the fund's limited partners (LPs), every number carries a conflict as well as a judgment.
Benchmarking Value Before the First Bid
Before a teaser goes out, the advisor needs its own view of value: to tell the GP whether a CV will clear at a price the LPAC can accept, and to have a yardstick when bids arrive. It is a benchmark, not a forecast.
Four Lenses on One Price
No single method supplies that view, so the advisor triangulates across four lenses:
| Lens | What it tells the advisor | Where it misleads |
|---|---|---|
| GP's reported NAV | The reference bids quote against | Set by the conflicted party; can be stale |
| Public comps and precedents | Where similar businesses trade and sell | Peer selection is a judgment |
| M&A market check | What a control buyer would pay | Soundings are not bids |
| Buyer return math | The price that meets buyers' targets | Depends on whose plan is used |
The reference NAV (net asset value) is the starting point, not the answer. It is the GP's own quarter-end mark, so the advisor tests its calibration, the multiples and peers behind it, as explained in how fund NAV is set, then checks it against comps and precedents. The market check asks what a control buyer would pay, through soundings or, occasionally, a formal sale run as one track of a dual-track process.
- Market Check
A test of what third-party buyers would pay for an asset, run through informal soundings or a parallel sale process, used to benchmark a price reached in a limited or conflicted process. In a continuation vehicle, it compares the CV price with what an M&A buyer would pay for control of the same company.
The fourth lens works backward from the buyers. Ignoring fees, fresh capital, and interim cash, a buyer targeting a multiple can pay roughly:
Evercore's H1 2026 secondary market review put average gross targets at about 2.3x for single-asset CVs over four years. If the GP's plan implies $1.15 billion of equity value in year four for a company marked at $500 million, a 2.3x buyer can pay par. Haircut the plan to $980 million and the same target supports about $426 million, or 85% of NAV. Buyers' models are covered in how buyers assess a continuation vehicle; the advisor only needs to know which plan assumptions separate par from a discount.
Framing the Range for the GP and the LPAC
The lenses rarely agree, so the output is a range, often drawn as a football field chart. A GP told to expect 85 to 95 may hear 85 as acceptable, and an LPAC may treat any bid inside the range as fair, so its bottom can become the clearing price. Advisors tie each end to its assumption and agree a walk-away level below which holding or an outright sale serves the fund better.
Nor is this work a fairness opinion. The advisor forms its view before bids, to run a process it is paid to complete; the opinion comes afterwards, from an independent provider, and says only that the cash price is fair from a financial point of view, as conflicts of interest, fairness opinions, and the ILPA guidance explains.
Soliciting Bids: Tension From a Small Pool
A CV auction must produce one lead whose price and terms become the deal, so its quality depends on the buyer list, the information flow, and the timetable.
Sizing the Buyer List
For a single-asset CV, the list is set by check size and company-level underwriting skill. In Jefferies' review of the first half of 2026, nearly 15% of secondary investors could write checks above $250 million into single-asset CVs, up from 11% in 2025, so the lead list is short and largely known in advance. A multi-asset CV draws a wider field, including evergreen vehicles, because a diversified portfolio fits more mandates.
Too few names and there is no competitive tension; too many and one company's plan circulates among investors who may back its competitors. The Institutional Limited Partners Association (ILPA) asks GPs, in its 2023 guidance, to show the LPAC how bids were solicited and what excluded any acquirers, so the list becomes evidence.
Information, Tension, and Pre-Emptive Approaches
Tension comes from information sequencing and the timetable: a teaser and confidentiality agreement, first-round indications, then management meetings for a shortlist, with no exclusivity until the lead is chosen. The trade-offs mirror auction processes versus negotiated sales in M&A, except that existing LPs must see comparable information too.
The hardest call is a pre-emptive bid. Jefferies reported that pre-emptive transactions gained momentum in H1 2026 as sponsors sought speed and certainty.
- Pre-Emptive Bid
An offer made before or early in a sale process, typically at an attractive price with a short deadline, in exchange for exclusivity or an end to the auction. In a continuation vehicle, it lets one buyer become lead without a full competitive round, trading price evidence for speed.
A pre-empt removes the auction that proves the price, so the advisor measures it against the benchmark and, where time allows, runs a short targeted check with a few lead-capable buyers before recommending exclusivity.
Choosing a Lead on Terms, Not Just Price
Selling LPs care most about price, but rolling LPs live with the terms, and the whole fund bears the risk of a failed deal. The advisor may prefer a lower headline when the higher one rests on a large deferral, a stapled commitment to the GP's next fund, or heavy syndication risk. Sponsor economics are part of the contest too: Evercore found super carry in more than a third of GP-led transactions, offered by bidders to stand out.
Syndication: Filling the Book Behind the Lead
Once the lead is chosen, the job becomes book-building: unless the lead takes everything, the remaining equity goes to syndicate investors at the lead's price and on substantially its terms. Evercore data cited by GCM Grosvenor found an average of 7 new investors in continuation fund raises of $250 million to $500 million, 12 in raises of $500 million to $1 billion, and 17 above that. The lead's own economics are covered in lead investors and syndication.
The Lead's Role and the Allocation Decision
The lead anchors the book, and its ticket sets how much is left to place; elections set the rest, since rolled interests need no new money. When the book is full, allocation is decided with the GP, weighing early commitments and rolling LPs' top-up rights, and the advisor must be able to explain the result to the LPAC.
Why Syndicates Thinned in 2026
Jefferies' H1 2026 secondary market review reported that syndicate capital on transactions under $750 million had significantly decreased, as buyers competed by underwriting the whole equity, and that subscription line facilities were used more often alongside, and sometimes instead of, portions of it. Thinner syndicates mean more reliance on the lead and less outside evidence for the price. The book can still miss either way:
| Book outcome | Advisor's levers | Who bears the cost |
|---|---|---|
| Undersubscribed | Lead or GP upsizes; fresh capital trimmed; subscription line; delay | Rolling LPs and GP via conceded terms; sellers if closing slips |
| Oversubscribed | Allocations scaled back; top-up rights prioritized | Investors cut back; the advisor, asked whether price left room |
Oversubscription reads well in a release but also shows demand at the lead's price exceeded supply, as the July 2026 announcement of Blue Sea Capital's first continuation vehicle illustrates.
The Advisor's Own Conflicts
The GP hires the advisor, yet ILPA's May 2023 continuation fund guidance recommends that its engagement letter require it to represent the fund, not solely the GP. Three pressures pull against that:
- Success fees. Pay arrives at closing, so a CV done at an adequate price earns more than advice to hold or sell.
- Repeat buyer relationships. The lead-capable pool is small, so pushing a buyer hard on price, or rationing its allocation, has a cost on the next mandate.
- Repeat GP relationships. Sponsors that run one CV often run more, and ILPA asks that the advisor's past dealings with the GP be disclosed to all LPs.
Who bears the fee is set out in how PCA firms make money. The protections are procedural: LPAC access to the advisor to question the merits of bids, and, under ILPA's June 2026 draft, the option of an independent financial advisor for the committee to judge whether the bid process was competitive.
The three jobs run in one direction and fail in the other. A book that does not fill sends pressure back up the chain, and the advisor ends up renegotiating with the lead the price it spent the process defending. The syndicate is the last test of the first number.
