hard · Private Equity & LBOs
A GP-led 'Single-Asset Continuation Vehicle' (CV) is formed to purchase a 'crown jewel' from an older fund. The transfer price implies a 3.0x MOIC for the selling fund.
If the GP has 20% carry in the selling fund and chooses to roll 100% of that carry into the CV, what is the effect on the CV's day-one ownership?
- No impact as carry is a fee, not equity
- GP ownership decreases due to dilution
- LPs receive additional shares to compensate
- GP ownership increases by the value of the rolled carry
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