Continuation vehicle is the successor legal entity—fund, SPV, or parallel pool—that acquires and continues to own assets transferred out of a prior fund.

How it works

In GP-led secondaries, the legacy fund sells designated positions to the continuation vehicle at an negotiated NAV or process with third-party pricing support. The vehicle raises commitments from rolling LPs, new LPs, and sometimes the GP to fund the purchase. Governance resets: new LPA, investment period extensions, and reporting cadence. Conflicts policies require LPAC oversight and disclosure of dual roles. Venture/growth continuation vehicles mirror PE mechanics at smaller scale—single-asset or multi-asset rolls. Portfolio companies experience cap table change at the fund level, not necessarily at operating company level, unless ownership structure shifts.

Why it matters

• LPs: Choose liquidity versus continued exposure; compare roll terms to secondary market bids and forward return case.
• GPs: Vehicle design affects carry crystallization, management fee base, and relationship with exiting LPs.
• Founders: Indirect effect via board member fund identity and follow-on capital source—ask who holds your cap table slot post-transaction.

Common mistake

Treating continuation vehicle pricing as identical to last internal mark. Transaction pricing is negotiated with process safeguards—it can diverge from prior quarterly valuations.

Related ideas

Continuation fund, GP-led secondary, NAV, LP roll, and fund termination connect to continuation vehicles.