Conflicts of Interest and Fiduciary Duties in GP-Led Secondaries

GP-led secondary transactions have become a standard liquidity mechanism in private equity, but they carry a conflict structure that has attracted sustained regulatory and litigation attention. When a general partner sponsors a continuation vehicle to acquire assets from a fund it manages, the GP simultaneously represents the selling fund's LPs, who need fair value today, and the continuation vehicle's investors, whose returns depend on a favorable entry price. The GP also has its own economic interests in carry crystallization, management fee continuity, and fund track record management. These interests do not automatically align with either constituency.

This sub-article is part of the Secondary Transactions in Private Equity: Legal Guide. It covers the full legal architecture of conflict management in GP-led secondaries: the nature of the conflict and its specific components, the Investment Advisers Act fiduciary duty framework, the SEC's 2023 Private Fund Adviser Rule requirements, the scope and limits of LP agreement conflict provisions, LPAC composition and independence requirements, the role and methodology of independent advisors and fairness opinions, Delaware general partner duty doctrine and contractual modification limits, enforcement actions and case law that define current expectations, and the documentation record a GP must create to demonstrate that the process was adequate.

Acquisition Stars advises general partners, secondary buyers, and institutional LPs on the legal structuring, regulatory compliance, and transaction documentation required in GP-led secondary transactions. Nothing in this article constitutes legal advice for any specific transaction.

The GP Conflict Inherent in GP-Led Secondaries

The general partner conflict in a GP-led secondary is not a contingent risk that arises from bad actors. It is a structural feature of the transaction design. When the GP organizes a continuation vehicle to acquire assets from a fund it manages, the GP controls the process on both sides: it selects which assets transfer, it negotiates the transfer price, it manages the disclosure to existing LPs, and it retains management authority over the assets post-transaction. Existing LPs who choose liquidity receive a price determined by a process controlled by a counterparty whose interests diverge from theirs in material ways.

Cross-fund pricing is one specific dimension of this conflict. Where the GP manages multiple funds with overlapping portfolios, the price at which an asset transfers from the legacy fund to the continuation vehicle affects the valuation marks across the GP's platform. A transfer price set above the legacy fund's carrying value improves the legacy fund's reported performance and supports carry crystallization. A transfer price set at or below carry creates a different optic. Neither outcome necessarily reflects the asset's true fair market value, and the GP's institutional interest in its own performance record can influence the pricing analysis in ways that existing LPs cannot observe.

Carry crystallization is a second distinct dimension. Most private equity fund structures provide that the GP earns carried interest once the fund has returned capital and a preferred return to LPs. In a GP-led secondary, if the transaction is structured to trigger a carry crystallization event, the GP receives immediate economic benefit contingent on the transfer price. A higher transfer price generates more carry for the GP; a lower price may not clear the carry threshold at all. This creates a direct incentive for the GP to advocate for a higher transfer price in its role as advisor to the selling fund, even though a lower price would benefit the LPs who are receiving liquidity.

The LP tradeoff between liquidity and value is the third dimension. Existing LPs who want liquidity are effectively choosing between accepting the transaction price and waiting for the fund's ordinary liquidation timeline. Where a fund is approaching the end of its term or holds assets that are difficult to value with precision, LPs may accept a below-fair-market-value price rather than face the uncertainty of a longer hold. The GP's control over the information environment, including access to portfolio company data that LPs do not have directly, exacerbates this information asymmetry. A process that does not include independent pricing validation does not give existing LPs a credible basis for evaluating whether they are being offered fair value.

Investment Advisers Act Fiduciary Duty Framework

A registered investment adviser owes its clients a fiduciary duty under the Investment Advisers Act of 1940. The SEC has articulated this duty as consisting of two components: a duty of care, requiring the adviser to act and provide advice in the client's best interest based on a reasonable understanding of the client's objectives, and a duty of loyalty, requiring the adviser to not subordinate the client's interests to its own and to either avoid conflicts of interest or make full and fair disclosure of those conflicts so that clients can provide informed consent.

In the private fund context, the SEC has consistently taken the position that the fund itself, not the individual investors, is the client for purposes of the Advisers Act fiduciary duty. This means the GP owes its duty to the fund, and by extension to the fund's LPs as the economic beneficiaries of the fund. The fiduciary analysis in a GP-led secondary requires the GP to evaluate whether its conduct in structuring, pricing, and consummating the transaction is consistent with its obligation to act in the fund's best interest, not merely in a way that does not rise to the level of fraud.

The duty of loyalty's disclosure component is demanding. The SEC's standard is full and fair disclosure, meaning that the disclosure must be specific enough to allow the client to understand the nature of the conflict and provide meaningful consent. Disclosure that describes a conflict in general terms without specifying its economic magnitude or the particular transaction in which it is operative does not satisfy the duty. Where the conflict cannot be disclosed in a way that permits meaningful consent, the adviser must either eliminate the conflict or decline to proceed with the transaction.

Rule 206(4)-7 Compliance Program Requirements

Rule 206(4)-7 under the Investment Advisers Act requires registered investment advisers to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and its rules. In the context of GP-led secondaries, the compliance program must address how the firm identifies conflicts of interest arising from secondary transactions, how those conflicts are disclosed to affected clients, and what process governs transactions in which the firm has a direct or indirect financial interest.

A compliance program that satisfies Rule 206(4)-7 in this context will typically include a conflicts of interest policy that specifically addresses continuation fund transactions, a review and approval process requiring compliance officer or committee sign-off before a GP-led secondary is launched, a protocol for obtaining LPAC approval and documenting the approval process, and a disclosure template that satisfies the specificity requirements for material conflict disclosure. The program should also include a testing and monitoring component that periodically reviews completed secondary transactions to confirm that the process was followed and that no undisclosed conflicts affected the outcome.

The SEC's examination staff has reviewed GP-led secondary compliance programs with increasing frequency as the market has grown. Examination findings in this area have included failures to disclose material conflicts, inadequate LPAC processes, and GP compliance programs that identified the general risk of secondary transaction conflicts but did not specify the procedures applicable to individual transactions. A compliance program that names the risk without specifying the response does not satisfy the rule's requirements.

SEC Private Fund Adviser Rule 2023: Fairness Opinion and Preferential Treatment Disclosure

In August 2023, the SEC adopted the Private Fund Adviser Rules under the Investment Advisers Act, which included specific requirements applicable to GP-led secondary transactions. The rules require advisers to obtain a fairness opinion or a written valuation opinion from an opinion provider that is independent of the adviser before completing a GP-led secondary transaction. The opinion must address whether the consideration to be paid in the transaction is fair, from a financial point of view, to the investors in the selling fund.

The rules also require disclosure of any material business relationship between the adviser and the opinion provider within the two years preceding the transaction. This requirement addresses a specific concern: that advisers might retain opinion providers with whom they have ongoing business relationships that create an incentive to deliver a favorable opinion. The disclosure obligation covers any advisory, consulting, capital markets, or other relationship between the adviser or its affiliates and the opinion provider, and it applies regardless of whether the adviser believes the relationship affected the opinion's conclusions.

The rules' preferential treatment disclosure provisions require advisers to disclose to all investors in the same fund any preferential treatment provided to one or more investors in connection with a GP-led secondary. This requirement addresses the practice of offering side letter terms to continuation vehicle investors, or to certain continuing LPs, that are not available to all investors making the same economic choice. The disclosure must be made before the investor's decision is finalized, not after closing, so that all investors can factor the existence of preferential treatment into their election decision.

Litigation challenging the rules, including the Fifth Circuit decision in 2024 that vacated significant portions of the Private Fund Adviser Rules, created uncertainty about the rules' ongoing enforceability. However, the substantive requirements the rules codified reflect long-standing SEC examination expectations that predate the rulemaking. GPs should treat the fairness opinion requirement and the preferential treatment disclosure standard as reflecting current examination expectations regardless of the rules' formal regulatory status, because SEC staff has consistently applied these standards in examinations and enforcement contexts.

SEC and Court Scrutiny of Cross-Fund Transactions

The SEC has examined and brought enforcement actions involving cross-fund transactions that disadvantaged one set of fund investors to benefit another. While many of these actions have addressed direct conflicts rather than GP-led secondary transactions specifically, the legal standards applied in those matters govern the secondaries context. The SEC has found violations where advisers allocated investment opportunities, portfolio assets, or transaction economics in ways that favored newer funds or carried interest structures at the expense of existing LP investors.

The SEC's 2022 and 2023 enforcement actions involving secondary market transactions focused on disclosure failures, particularly where advisers failed to disclose to existing LPs the terms of the GP's investment in the continuation vehicle, the fees to be earned by the GP from the continuation vehicle, or the carry crystallization economics generated by the transaction. These disclosure failures were found to violate both the Advisers Act's antifraud provisions and the specific conflict disclosure requirements applicable to registered advisers.

Delaware court decisions involving LP claims in the fund context have addressed the limits of contractual conflict waivers and the standard of review applicable to GP conduct in interested transactions. These decisions establish that even where the LP agreement broadly waives fiduciary duties, the GP remains subject to the implied covenant of good faith and fair dealing and to the express terms of the agreement. A GP that structures a secondary transaction to benefit itself at the LPs' expense, even where fiduciary duties have been waived, may still face liability for breach of contract or breach of the implied covenant if its conduct violates reasonable LP expectations under the agreement.

LPA Conflict of Interest and Affiliate Transaction Provisions

The limited partnership agreement is the primary contractual source of the GP's obligations in a secondary transaction. Most institutional fund LPAs include conflict of interest provisions that address transactions in which the GP or its affiliates have a financial interest, and many include specific provisions addressing transactions between funds managed by the same GP. These provisions vary significantly in their scope, specificity, and the approval process they require, and counsel must read the specific LPA governing the transaction rather than applying a generalized understanding of market terms.

Affiliate transaction provisions in older LPAs may not specifically contemplate the GP-led secondary structure, because this transaction type became common in the market after many institutional fund agreements were drafted. Where the LPA is silent on GP-led secondary transactions, the affiliate transaction provisions and general conflict of interest provisions apply by analogy. The GP should identify the provisions that most directly address the transaction's structure, analyze whether the approval requirements they impose have been satisfied, and document the analysis before proceeding.

LPA provisions governing the mechanics of LP consent in a secondary transaction vary widely. Some agreements require LPAC approval, others require LP majority approval, and some specify supermajority thresholds for transactions above a defined size. Where the agreement requires a vote of the LPs themselves rather than the LPAC, the GP must structure a voting process that gives all LPs adequate notice and a genuine opportunity to participate. Provisions that require approval "at the time of the transaction" have been interpreted to require approval before closing, not ratification after the fact, and the GP should obtain required approvals before committing to the transaction terms.

LPAC Composition and Independence

The limited partner advisory committee is the primary governance mechanism for conflict oversight in most institutional private equity fund structures. In a GP-led secondary, the LPAC is typically required by the LPA to review and approve the transaction as an interested party transaction or conflict of interest matter. The LPAC's ability to perform this function depends entirely on the independence of its members and the quality of the information and advice they receive.

Independence analysis for LPAC members in a secondary transaction covers several categories of potential conflict. A member whose institution has a co-investment relationship with the GP that generates fee income or preferential access to future transactions has a financial incentive to preserve the relationship by approving the transaction. A member whose institution is also investing in the continuation vehicle is reviewing a transaction in which it has a direct economic interest on the opposite side from the selling fund. A member who has a personal relationship with GP principals may find it difficult to exercise independent judgment against the GP's position. Each of these situations should be evaluated, and any member with a material conflict should be recused from the approval vote.

The LPAC's independence is procedurally supported by providing the committee with independent legal counsel, separate from the GP's counsel, to advise on the transaction process and the committee's obligations. Independent counsel allows the LPAC to receive advice on whether the disclosure package is adequate, whether the approval process satisfies the LPA's requirements, and whether any aspects of the transaction structure warrant renegotiation or additional conditions. A GP that resists the LPAC's engagement of independent counsel is not facilitating a genuine conflict-resolution process.

Engagement of Independent Advisor

An independent financial advisor in a GP-led secondary transaction performs a function distinct from the fairness opinion provider. Where a fairness opinion provider is engaged to deliver a written opinion addressing whether the transaction price is fair, an independent financial advisor may be engaged by the LPAC or a group of LPs to advise on the transaction process, review the GP's valuation methodology, negotiate transaction terms, and provide an independent view on the range of fair value for the portfolio assets. The distinction matters because the fairness opinion is retrospective, addressing a proposed price after the GP has set it, while the independent advisor can influence the pricing process before the price is fixed.

The engagement of an independent financial advisor by the LPAC is most effective when the advisor is retained at the outset of the transaction process, before the GP has completed its valuation work and proposed a transfer price. Early engagement allows the advisor to review the GP's portfolio data, form an independent view of value, and inform the LPAC's position before the GP presents a take-it-or-leave-it price. Late engagement, after the transaction economics have been substantially negotiated, limits the advisor's ability to influence the outcome and may reduce the engagement to a formality rather than a substantive check on the GP's pricing.

The independence of the financial advisor from the GP is subject to the same analysis as the fairness opinion provider's independence. Any prior or current advisory, capital markets, or placement agent relationship between the advisor and the GP or its affiliates must be disclosed and evaluated. An advisor who has received meaningful fees from the GP in the prior two years has a financial interest in maintaining the relationship that can affect the independence of its analysis. The LPAC should select an advisor with no material business relationship with the GP, or disclose and carefully evaluate any relationship that exists.

Fairness Opinion Scope and Methodology

The fairness opinion in a GP-led secondary is a written document delivered by an independent financial institution addressing whether the consideration to be received by the selling fund's LP interests is fair, from a financial point of view. The opinion does not constitute legal advice, does not address the transaction's legal adequacy, and does not substitute for the LPAC's exercise of business judgment. It provides an independent data point on price from a qualified financial institution that the LPAC and LPs can use in their deliberations.

The methodology underlying the fairness opinion applies recognized valuation approaches to the portfolio assets being transferred. For private equity fund portfolios, this typically includes a sum-of-the-parts valuation of individual portfolio companies using a combination of discounted cash flow analysis, comparable public company multiples, and precedent transaction multiples where available. The opinion provider reviews the GP's own internal valuation model and the assumptions underlying it, forms an independent view of the plausible range of values for each asset, and assesses whether the proposed transfer price falls within that range. The opinion does not typically opine on the exact fair market value of the assets; it addresses whether the consideration is fair given the range of reasonable values.

The scope of the engagement letter governing the fairness opinion determines what the opinion will and will not cover. A scope limited to the headline transfer price does not address whether the transaction structure, including the GP's carry crystallization, the fee terms of the continuation vehicle, and any preferential terms offered to certain LPs, is fair in its totality. The LPAC and its counsel should specify in the engagement letter whether the opinion is expected to cover the transaction holistically or is limited to the transfer price, and should understand the implications of that scope limitation before relying on the opinion in the approval process.

LPAC Approval Mechanics, Cooling-Off Periods, and Carve-Outs

The mechanics of LPAC approval in a GP-led secondary must be designed to give the committee a genuine opportunity to evaluate the transaction, seek independent advice, negotiate modifications, and vote with full information. A process in which the GP presents transaction materials and seeks approval in a compressed timeline, without allowing adequate time for independent review, does not satisfy the function the approval requirement is designed to serve. The LPA's approval requirement reflects an expectation that the LPAC will exercise substantive oversight, not merely formal consent.

Cooling-off periods, where included in the transaction timeline, are intervals between the GP's presentation of transaction terms and the LPAC's formal approval vote. These periods allow LPAC members to consult with their own institutional advisors, review the fairness opinion, obtain independent legal advice, and deliberate without the pressure of an imminent deadline. Some LPAs specify a minimum cooling-off period for interested party transactions. Where the LPA does not specify a period, the GP should build adequate time into the process based on the complexity of the transaction and the volume of materials the LPAC must review.

LPA provisions sometimes carve out certain transaction types from the standard LPAC approval requirement. These carve-outs may cover transactions below a defined size threshold, transactions involving assets that have been held for a defined period, or transactions where the transfer price is set by reference to an independent appraisal. The applicability of any carve-out to a specific GP-led secondary transaction must be analyzed against the LPA's language and the specific facts of the transaction. A GP that relies on a carve-out to proceed without LPAC approval when the carve-out's conditions are not satisfied has failed to obtain a required contractual approval and faces potential claims from LPs who were entitled to the protection that approval was designed to provide.

Disclosure Package: Risk Factors, Pricing Rationale, and Conflict Disclosure

The disclosure package sent to existing LPs in connection with their election decision in a GP-led secondary is the primary document through which the GP satisfies its Advisers Act disclosure obligations. The adequacy of the disclosure is evaluated against the standard of full and fair disclosure required by the fiduciary duty. A disclosure package that describes the transaction in general terms, omits the specific financial interests of the GP in the outcome, and fails to explain the basis for the transfer price does not satisfy this standard.

The risk factors section of the disclosure package must specifically identify the conflicts of interest inherent in the transaction, including the GP's carry crystallization interest, the GP's investment in the continuation vehicle, any fee arrangements that change as a result of the transaction, and any prior valuation history that is inconsistent with the proposed transfer price. Generic conflict disclosure language that could apply to any secondary transaction is not adequate. Each material conflict specific to the transaction must be identified and described with enough specificity to allow LPs to assess its magnitude and relevance to the pricing decision.

The pricing rationale section must explain the methodology used to arrive at the transfer price, the key assumptions underlying the valuation, and any differences between the proposed transfer price and the fund's prior carrying values for the same assets. Where the transfer price represents a discount or premium to the most recent carrying value, the disclosure must explain the basis for that difference. LPs cannot evaluate whether the transfer price is fair without understanding how it was derived and what assumptions support it. The disclosure should also summarize the fairness opinion, including its scope limitations, the identity of the opinion provider, any material relationships between the opinion provider and the GP, and the opinion's conclusion.

Delaware General Partner Fiduciary Duty Principles

Delaware law governs the fiduciary duties of a general partner in most institutional private equity fund structures, because most funds are organized as Delaware limited partnerships. Under the Delaware Revised Uniform Limited Partnership Act, a general partner owes the limited partners a duty of care and a duty of loyalty, subject to modification or elimination by the limited partnership agreement. The Act expressly permits the partnership agreement to restrict or eliminate fiduciary duties, which has led many institutional fund agreements to include broad waivers of fiduciary duties not expressly required by the Act.

The duty of loyalty in the default Delaware framework requires the GP to act in the interest of the fund and its LPs when exercising its authority under the agreement. In an interested transaction, this duty requires the GP to ensure that the terms are fair to the fund, not merely that the terms benefit the GP. Where the LP agreement has modified the duty of loyalty, the scope of the GP's remaining obligation depends on the specific language of the modification. Courts have interpreted modification provisions narrowly where the language is ambiguous, preserving the GP's default duty to the extent the modification does not expressly eliminate it.

The implied covenant of good faith and fair dealing applies to every Delaware limited partnership agreement and cannot be waived or eliminated by the parties. The implied covenant requires each party to the agreement to act in a manner that does not frustrate the reasonable expectations of the other party that arise from the agreement's express terms. In a GP-led secondary, the implied covenant has been invoked to challenge transaction structures where the GP's conduct, while not technically violating an express provision of the LPA, undermined the LPs' reasonable expectation of fair dealing in the conflict resolution process. The implied covenant does not impose a fiduciary duty where one has been waived; it requires that the party exercise the discretion granted by the agreement in a manner consistent with what the parties reasonably expected.

Contractual Modification and Waiver Limits

The Delaware RULPA permits broad contractual modification of fiduciary duties, but several constraints limit the effectiveness of waivers in the GP-led secondary context. First, a modification must be express and specific to eliminate a duty. A general waiver of fiduciary duties not expressly required by the Act will eliminate the default duties, but courts will not read such a waiver as also eliminating the implied covenant or as authorizing conduct that the agreement's express terms prohibit. Second, a modification cannot eliminate the implied covenant, which functions as a gap-filler and behavioral constraint that applies regardless of the fiduciary duty analysis.

Third, and most practically important, the Advisers Act fiduciary duty applies to the GP as a registered investment adviser independent of the LP agreement's fiduciary duty provisions. The LP agreement can waive Delaware common law fiduciary duties; it cannot waive the federal fiduciary duty imposed by the Advisers Act. This means that even where a GP has effectively waived its Delaware fiduciary duties through the LP agreement, it remains subject to the full Advisers Act duty of care and duty of loyalty as a registered adviser. In practice, this federal overlay substantially limits the practical effect of fiduciary duty waivers in fund agreements governed by the Advisers Act.

Fourth, many LP agreements that purport to waive fiduciary duties include a carve-out preserving the duty of good faith and the implied covenant. Where this carve-out appears, the modification does not achieve a full waiver of duties and the GP's conduct in the secondary transaction remains subject to the good faith standard that the carve-out preserves. Counsel reviewing the LPA before a GP-led secondary should identify the specific scope of any duty modification, map the remaining obligations, and confirm that the transaction structure satisfies all remaining duties and obligations under both the agreement and applicable law.

Recent Enforcement Actions and Case Law Lessons

The SEC's enforcement program has addressed conflicts of interest in private fund transactions with increasing consistency over the past several years. Actions in this area have established several clear expectations. First, disclosure of a conflict in fund offering documents or in an annual disclosure update does not satisfy the specific disclosure obligation triggered when the conflict is actually operative in a pending transaction. The SEC expects transaction-specific disclosure at the time the conflict arises, not reliance on prior general disclosure.

Second, advisers who cause one fund to transact with another fund they advise must demonstrate that the terms of the transaction are fair to both funds and have not been influenced by the adviser's interest in generating more favorable economics for one fund. Where the SEC has found that a cross-fund transaction was priced to benefit the GP's carry position in one fund at the expense of the other, it has brought enforcement actions alleging breach of the Advisers Act fiduciary duty and violations of the antifraud provisions. These actions have resulted in disgorgement of ill-gotten gains, civil money penalties, and in some cases, limitations on the adviser's ability to conduct future transactions of the same type.

Delaware court decisions in LP disputes have addressed the standard of review applicable to GP conduct in interested transactions where fiduciary duties have been modified. Courts have applied a contractual analysis focused on whether the GP satisfied the express requirements of the LP agreement and acted consistently with the implied covenant. Where the LP agreement required LPAC approval and the LPAC gave approval following a process that meets a basic adequacy standard, courts have generally declined to second-guess the LPAC's business judgment. Where the LPAC process was a formality rather than a genuine deliberation, or where the LPAC was not provided with the information necessary to make an informed decision, courts have found that the approval requirement was not satisfied and that the GP remains liable for the consequences of the interested transaction.

Documentation of the Conflict Resolution Process

The documentation record of a GP-led secondary's conflict resolution process serves two functions: it demonstrates to regulatory examiners that the process was adequate, and it provides the evidentiary foundation for the GP's defense if LPs challenge the transaction after closing. Both functions require that the documentation be contemporaneous, specific, and complete. A record assembled after the fact, or one that describes the process in general terms without capturing the specific deliberations and information provided to the LPAC, is substantially less valuable than a contemporaneous record that demonstrates each step as it occurred.

The documentation record should include: the conflict identification memorandum prepared by the GP's compliance team identifying each specific conflict created by the transaction; the disclosure package sent to all LPs including its date of delivery and the LP communication log; the materials provided to the LPAC including the valuation analysis, the fairness opinion, the independent legal advice received by the LPAC, and any supplemental information requested by the LPAC and provided; the LPAC meeting minutes or written deliberation record reflecting the substance of the committee's review and the basis for its approval; the formal LPAC approval document or consent; and any LP opt-out elections and the election process documentation.

Retention of the documentation is governed by the Advisers Act's books and records requirements, which require registered advisers to maintain records of their advisory business for defined retention periods. Records of advisory contracts, communications with clients regarding conflicts of interest, and approvals obtained in connection with interested transactions are generally required to be maintained for five years from the date of creation, with the first two years in an accessible location. The compliance program should specify retention requirements for secondary transaction documentation and designate responsibility for maintaining the record throughout the required retention period.

Post-Closing Reporting Obligations

The GP's obligations in a GP-led secondary do not end at closing. Post-closing reporting obligations arise from the LP agreement, the Advisers Act, and the continuing duty to keep LPs informed about matters material to their interests in the fund. These obligations cover reporting on the transaction's completion, reporting on the continuation vehicle's performance, and disclosure of any post-closing developments that affect the information provided to LPs in connection with their election decision.

LPs who elected liquidity in the secondary transaction are entitled to receive confirmation of the closing, confirmation of the proceeds calculation and any adjustments, and confirmation that the transaction closed on the terms described in the disclosure package. Where closing adjustments affect the final proceeds, the GP must explain the basis for those adjustments and confirm they are consistent with the transaction documents. Any variance from the disclosed terms that was not specifically contemplated in the disclosure package may require supplemental disclosure and, depending on its magnitude, may give rise to LP claims.

LPs who elected to roll their interests into the continuation vehicle are entitled to receive the continuation vehicle's ongoing reporting, including periodic performance reports, audited financial statements, and any material developments affecting the portfolio companies. The continuation vehicle's reporting obligations should be specified in the subscription documents and the continuation vehicle's limited partnership agreement, and they should not be materially inferior to the reporting that LPs received from the legacy fund. Advisers Act Form ADV reporting requirements and the SEC's 2023 Private Fund Adviser Rule reporting obligations for continuation vehicles should also be addressed with regulatory counsel before the continuation vehicle begins operations.

Frequently Asked Questions