A GP-led secondary is a portfolio liquidity event led by the general partner—typically offering LPs the choice to sell interests or roll into a continuation structure holding selected assets.

How it works

When a fund nears end of life but holds valuable companies, the GP arranges a secondary process—often with an advisory firm—pricing LP interests and portfolio assets. LPs elect cash out (partial or full) or roll into a new continuation fund managed by the same GP. Assets marked for continuation transfer to the new vehicle with fresh economics and often new LP capital from secondaries specialists. Pricing relies on recent financings, public comps, and independent fairness opinions. GP-led processes differ from LP-initiated secondaries where an LP sells its stake on the market without GP orchestration.

Why it matters

• Founders: Continuation can mean stable sponsorship and fresh capital for growth; it can also extend private life and delay IPO with new governance from secondary buyers.
• Investors: LPs evaluate pricing fairness, fee reset, and whether rolling aligns with their liquidity needs versus taking cash now.

Common mistake

Assuming all LPs must roll. Good GP-led processes offer genuine choice and transparent pricing—forced rolls erode trust and face pushback.

Related ideas

Continuation fund, LP-led secondary, fund extensions, portfolio company hold period, and DPI versus TVPI.