medium · Private Equity pe-core
A GP is launching a single-asset Continuation Vehicle (CV) to hold its best-performing asset, AlphaTech, beyond the original fund's life. The current NAV of the asset is $400M. The GP negotiates a transfer price of $440M with secondary buyers.
If an LP in the original fund with an $8M NAV interest elects to 'roll' into the CV, what is the most likely outcome for their interest?
- They are forced to contribute an additional $4M in new capital.
- They receive $8.8M in cash and exit the investment.
- They retain an $8M economic interest in AlphaTech under the new CV terms.
- Their interest is written down to $4M to account for new secondary buyers.
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