A continuation fund puts the GP on both sides of the table.

In an ordinary sale, a buyer and a seller negotiate against each other, and the price settles somewhere between what each would accept. A GP-led secondary removes that tension. The firm selling the company out of the old fund is the same firm buying it into the new one — it chooses which asset moves, influences the valuation, writes the terms of the vehicle it is selling into, and keeps managing the company afterward. Every role that would normally be split between two adversaries sits with one party.

This is the mechanism working as designed, not a loophole a bad actor slips through. The general partner is on both sides because the entire purpose is to keep the asset under the same management while resetting the fund around it. That makes the conflict inherent, which means it can't be eliminated — only disclosed, priced, and checked. The question a continuation vehicle actually turns on is not whether the conflict exists, but whether the machinery around it is strong enough to hold.

What holds it in check

Two mechanisms do most of that work. The first is an independent fairness opinion, in which a retained financial advisor opines that the price the new vehicle pays is fair from a financial point of view. The second is a competitive process that tests the price against the actual market of secondary buyers, paired with a mandatory vote of the limited partners rather than the quiet consent of an advisory committee. The guidance published by the Institutional Limited Partners Association formalizes both, and adds the details that make them real: a review period measured in weeks, full disclosure of the sponsor's economics, and a status-quo option that lets an LP roll into the new vehicle on its original terms instead of being repriced.

The question isn't whether the conflict exists. It's whether the machinery around it is strong enough to hold.

None of this makes the conflict disappear, and it isn't meant to. A fairness opinion narrows the range a price can credibly fall in without proving it is the best one available. A competitive process only tests the market when the market actually shows up to bid. That leaves the limited-partner vote as the real backstop — the single point where the party without the conflict gets to decide — which is why a GP-led secondary is better judged by how genuine that vote is than by the existence of the opinion that precedes it.

The reason to understand this structure is not suspicion. Continuation vehicles are now a routine way for private equity to hold its best companies past a fund's term, and most are run cleanly. But routine is exactly when a structural conflict gets waved through on the strength of a document — and a fairness opinion is a document. What protects a limited partner is not the opinion. It is the process and the vote the opinion sits inside.