Introduction
Not long ago the product went by a less flattering name. The Institutional Limited Partners Association (ILPA) titled its April 2019 guidance on these deals "GP-led Secondary Fund Restructurings"; its May 2023 guidance was called simply "Continuation Funds". The change in vocabulary tracks a change in the product. A fund restructuring was something a general partner (GP) did to a fund that had run out of time and, often, out of options. A continuation vehicle (CV) is something the largest managers now choose for companies they want to own for longer: Jefferies reports that by 2025 nearly 80% of the top 100 sponsors by assets under management had completed one.
Both belong to the family of GP-led secondaries, the half of the secondary market in which the manager, rather than an investor, starts the transaction. They are an unusually delicate mandate for a private capital advisory (PCA) banker, because the client that hires the advisor also sits on both sides of the price.
What Makes a Secondary GP-Led
Three features separate a GP-led transaction from the rest of the secondary market. The initiator is the fund's GP, which decides that a transaction should happen, designs it, and hires the advisor. New capital arrives, usually from secondary buyers, to buy assets or fund interests that existing investors hold. And the GP stays in control: after closing, the same team manages the same companies, often inside a new vehicle with a fresh term and reset economics.
- GP-Led Secondary
A secondary transaction initiated by the general partner of a private fund, in which assets or fund interests move to new investors while the GP continues to manage the underlying investments. Continuation vehicles, tender offers, strip sales, fund restructurings, and GP-led preferred equity all belong to the category.
In a sale led by a limited partner (LP), by contrast, the investor sells its own fund interest and the GP mainly consents to the transfer. The side-by-side comparison in the LP-led overview sets the two halves of the market against each other on who starts a deal, who prices it, and who is conflicted. Who starts the deal decides its label, which is why a tender offer counts as GP-led even though each investor decides for itself whether to sell.
Who Decides and Who Chooses
A GP-led deal splits the decision in two. The manager decides that a transaction happens, when, and in what form. Each LP then makes its own election: in a continuation vehicle, to sell its share of the transferred assets for cash or to roll into the new vehicle. A status quo option, where one is offered, is a way of rolling on protected terms, not a third destination, as LP elections and status quo terms explains. The manager's reasons for starting a deal, from fund-life limits to pressure on distributions, are catalogued in why LPs and GPs need liquidity. Because the GP sets the agenda and the LPs can only respond, the advisor's central problem is the fairness of the process rather than a seller's urgency.
The GP-Led Product Family
GP-led deals come in six main structures, which sort into sales to a new vehicle, sales of LP interests or slices, and capital without a sale. They differ in what moves, who supplies the capital, and what the existing LPs are asked to decide:
| Structure | What moves | Who provides capital | What existing LPs decide |
|---|---|---|---|
| Single-asset CV | One company, into a new vehicle | A lead buyer and syndicate | Sell or roll |
| Multi-asset CV | Several companies, into a new vehicle | A lead buyer and syndicate | Sell or roll |
| Fund restructuring | The whole remaining portfolio, or the fund's terms | Secondary buyers | Sell or roll into reset terms |
| Tender offer | LP interests in the existing fund | A buyer the GP arranges | Whether to sell at the set price |
| Strip sale | A slice of every position | One or more secondary buyers | Nothing; cash goes to all pro rata |
| GP-led preferred equity | Nothing is sold; a priority claim is created | A preferred equity investor | No individual election |
Continuation Vehicles, Single-Asset and Multi-Asset
The continuation vehicle is the workhorse of the family. The GP forms a new fund, which buys one or more companies from an older fund it also manages; a lead investor sets the price and terms, and a syndicate of other buyers fills out the capital. A single-asset CV concentrates everything on one company and is diligenced much like a buyout, while a multi-asset CV spreads exposure across several companies and behaves more like a small fund. The trade-offs between the two, and why neither reliably prices better, are the subject of continuation vehicles explained.
Tender Offers and Strip Sales
In a tender offer, the GP arranges for a buyer to offer every LP the same price for its interest in the existing fund, often alongside a stapled commitment to the manager's next fund, while the fund itself carries on unchanged. A strip sale sells the same percentage of every portfolio company to a secondary buyer and distributes the cash to all LPs pro rata, so no investor has to choose anything. Tender offers and strip sales covers when a GP prefers either one to a CV.
Fund Restructurings and GP-Led Preferred Equity
A fund restructuring, the product's original form, deals with a whole fund at once: its remaining portfolio moves to a new vehicle, or its term and economics are reset, with a secondary buyer funding the exit of LPs who want out. GP-led preferred equity sells nothing. A structured investor puts capital into the fund, or into a vehicle holding its assets, in return for a priority claim on distributions, and the cash funds distributions or follow-on investments. How that priority layer is priced and repaid is covered in preferred equity and structured fund solutions.
From Zombie Funds to Trophy Assets
The first GP-leds dealt with end-of-life funds that investors wanted to forget; the current generation deals with trophy assets that buyers compete to own. The path between them ran through four stages.
The Restructuring Era After the Financial Crisis
After 2008, many managers that had raised funds in the mid-2000s could not raise successors. Their older funds still held companies and still charged fees, but had no obvious end, and LPs gave them an unkind name.
- Zombie Fund
An informal, pejorative term for a private equity fund near or past the end of its term whose manager holds unsold investments with no clear route to exit and, often, no successor fund, so the fund keeps paying fees while LPs wait for their capital.
The remedy was a restructuring. A secondary buyer funded a cash-out option for LPs who wanted out, the fund's life was extended, and the GP received reset economics, new carry or fee terms tied to the extension, so it had a reason to keep working the assets. ILPA's 2019 guidance on GP-led fund restructurings observed that LPs knew such deals from end-of-life and key person situations, and that they were no longer solely the domain of "challenged franchises or so-called 'zombie funds'". The stigma was the defining feature of the era: a GP proposing a restructuring was usually admitting that its fund had run out of road.
Nordic Capital CV1 and the Performing-Asset Turn
The turn came when strong managers used the same structure for funds that were doing well. In 2018, Nordic Capital moved the nine unlisted companies left in its 2008-vintage Fund VII, whose original term had expired in December 2017, into a new vehicle, Nordic Capital CV1, in a €2.5 billion transaction. Nordic's announcement of the closing named Coller Capital as lead investor, Goldman Sachs Asset Management's Vintage Funds also underwriting the deal, and Campbell Lutyens as financial advisor.
What CV1 proved was that a GP could ask for more time without confessing failure, provided outside buyers set the price and investors could leave at it.
Single Assets and the 2020-2021 Surge
Jefferies' annual series shows how quickly the rest of the market followed. In its January 2023 secondary market review, GP-led volume rose from about $9 billion in 2016 to $26 billion in 2019 and $35 billion in 2020. That year, with LP portfolio sales frozen by pandemic pricing, GP-leds made up 58% of all secondary volume, and in 2021 they almost doubled again to $68 billion.
The mix shifted as volume grew:
- Structure. Continuation funds made up about 85% of Jefferies' GP-led volume in 2022.
- Concentration. Single-asset CVs accounted for about half of completed transactions, as sponsors used the structure for their best companies rather than their tails.
- Alignment. Reinvestment became the price of entry: about 90% of closed continuation funds that year featured key GP principals reinvesting all or more of their realized economics.
The same review judged that for sponsors the question had moved from whether to run a GP-led to when. By then the product had its landmark deals, the ones covered in landmark continuation vehicles, from Vista's Cloud Software Group vehicle to Inflexion's multi-asset fund.
The 2025 Records
By 2025 both major surveys recorded all-time highs. Evercore's 2025 secondary market report and Jefferies' 2025 global secondary market review build their numbers from different deal samples, so each figure belongs with its source:
| Measure | Evercore 2025 | Jefferies 2025 |
|---|---|---|
| GP-led volume | $106 billion, up 51% | $115 billion, up 53% |
| Total secondary volume | $226 billion | $240 billion |
| Inside the GP-led total | Single-asset CVs about $52 billion, multi-asset about $42 billion, other about $12 billion | Single-asset CVs above half of CV volume for the first time |
| Scale | Over 10% of surveyed buyers can write single-asset checks of $300 million or more | Average CV about $900 million; 29 GP-leds above $1 billion |
| Reach and adoption | Companies in North America 63%, Europe, Middle East and Africa 35% | Nearly 80% of top 100 sponsors had done a CV; GP-leds about 14% of sponsor-backed exit volume |
Two readings matter. First, neither total is continuation-vehicle volume. Evercore's definition of GP-led includes GP-led preferred equity and tender offers, which sit in its "other" bucket, so CVs alone were about $94 billion of its $106 billion. Second, the adoption figures say something the totals cannot: the product has moved from a minority of managers to the standard toolkit of the largest ones. The GP-led market and the single-asset CV shift follows the latest data by structure, pricing and sector.
Why GP-Leds Took Over
No single cause explains the growth. A push from aging portfolios met a pull from buyers, managers, and LPs who each found a reason to accept the product.
The Push: Exit Backlog and DPI Pressure
Exits slowed while funds aged. Holding periods stretched, an exit backlog of unsold companies built up, and LPs that fund new commitments from old distributions began judging managers on distributions to paid-in capital (DPI), the metric set out in reading a fund track record. A continuation vehicle turns part of a portfolio into cash for the LPs who want it without forcing one of the conventional exit routes at a moment the GP did not choose.
Whether a CV serves existing investors better than a sale is decided case by case. How an advisor weighs that choice is set out in CV vs sale vs dividend recap.
The Pull: Buyer Capital, Winners, and LP Acceptance
The push alone would have produced more restructurings, not a new asset class. Three changes on the other side of the table turned it into one:
- Buyer capital. Dedicated secondaries funds raised far larger pools and hired teams able to diligence single companies, which is how more than one in ten buyers in Evercore's survey could write a $300 million check into a single-asset deal.
- Keeping winners. A GP that believes a company has years of growth left can keep it, raise capital for it, and give its investors a choice, instead of selling at the end of the fund's term.
- LP acceptance. Guidance from ILPA gave LPs a checklist to judge each deal against, from review by the limited partner advisory committee (LPAC) to minimum election periods, and repeated deals made the structure familiar enough to be routine.
The three reinforce one another, and the buyers behind them are profiled in the secondaries buyer universe. Deeper buyer pools make prices more credible, credible prices make LPs more willing to accept the structure, and wider acceptance lets GPs propose CVs for better assets, which in turn attracts more buyer capital.
The Conflict at the Centre of Every GP-Led
Growth has not quieted the criticism, because the structural problem never goes away. In a continuation vehicle the GP acts for the selling fund and manages the buying vehicle, and it usually gains from the deal whatever the price: carry on the transferred assets may be crystallized or reset, the new vehicle pays fees, and a sale at a strong price can flatter the old fund's record. The CFA Institute's September 2025 report on continuation funds put these points at the centre of its critique, and traced how far the structure's reputation has travelled, from zombie funds to trophy assets. How the GP's carry, reinvestment, and fees actually work is set out in CV economics.
The industry's answer is a set of protections that operate separately. LPAC conflict review is the advisory committee's consent to the conflict under the fund's limited partnership agreement (LPA), a mechanism explained in LPACs and ILPA principles. Contractual approvals are whatever further LP consents the LPA itself requires. Individual elections let each LP accept the price or roll. Around them sit process tools such as third-party price validation and a fairness opinion.
Law adds less than many candidates assume. The Securities and Exchange Commission (SEC) adopted a rule in 2023 that would have required a fairness or valuation opinion for adviser-led secondaries, but the Fifth Circuit vacated the private fund adviser rules in June 2024, a story told in the SEC rules and their vacatur. ILPA's guidance is best practice, not a legal requirement, and ILPA published draft guidance in June 2026 to replace its 2023 version; the comment period closed on August 5, 2026, and the final text was still pending. The full treatment is in conflicts of interest, fairness opinions, and the ILPA guidance.
What the Advisor Does in a GP-Led
The advisor is engaged by the GP, yet ILPA's May 2023 continuation fund guidance recommends that the engagement letter require the advisor to represent the interests of the fund, not solely the GP, and that the LPAC review the advisor's selection, role, and fee. That tension defines the job. The work runs across four areas:
- Rationale and alternatives. Helping the GP test why a transaction beats a sale or an extension, the case the LPAC hears first.
- Valuation benchmarking. Forming a view of value before bids arrive, so the eventual price can be tested rather than simply accepted.
- The buyer process. Soliciting bids, recommending a lead investor, and syndicating the rest of the capital.
- LP communication. Preparing election materials, answering investor questions, and managing the election period.
The advisor's role in a GP-led goes deeper on valuation, bid solicitation, and syndication, and the continuation vehicle process step by step places each task on the timeline from mandate to closing. What connects them is defensibility: the advisor's output is a price and a process that the LPAC, selling LPs, and rolling LPs, none of whom hired the advisor, can accept as fair.
The product's final test is still under way. Most continuation vehicles are young: the HEC Paris study summarized in Evercore's report covers 387 CVs formed from 2018 to 2024 and describes its findings as early, with single-asset CVs so far performing broadly in line with buyout funds and with narrower dispersion. Nordic's CV1 was given about five more years, and vehicles formed in the 2021 surge were only about four years old at the study's mid-2025 data cut. As their companies are sold, rolling LPs will learn whether the prices advisors defended were fair, and that record, more than any annual volume total, will decide whether GP-leds keep the place they have taken.
