Continuation Funds: A Clean Governance Playbook
Why it matters
Continuation vehicles let GPs extend ownership in high-conviction assets while giving existing LPs clear choices. Scrutiny is rising, so process quality now separates strong outcomes from painful ones.
Principles
Rationale first: document the strategic case before structure or pricing.
Conflicts hygiene: special committee, independent advice, recorded decisions.
Price discovery: multiple references, a short valuation memo, sensitivities and scenarios.
Choice architecture: explicit options, realistic timelines, no pressure.
Symmetry of information: same materials and timing for every LP.
Evidence by default: versioned files, timestamps, approver IDs.
LP communications pack
One-page rationale with risks and alternatives.
Economics explainer covering fees, carry, alignment.
Valuation overview with inputs and triangulation.
Election instructions and deadlines.
FAQs and a contact channel for clarifications.
Execution rhythm
Pre-announce with rationale and conflicts setup.
Price discovery with independent references and a valuation memo.
LP memo and FAQs, then open elections.
Confirm allocations and economics in writing.
Post-close note showing what was promised and what was done.
Archive valuation files, minutes, communications, and a timeline.
KPIs
High LP participation with balanced election outcomes.
Minimal post-memo clarifications.
Evidence pack compiled within hours.
Takeaway
Treat the continuation vehicle as a governance product. Process first, price second. Trust follows.