hard · Private Equity pe-core
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?
- There is no impact, since carry is only a fee
- GP ownership decreases due to secondary-sale dilution
- LPs receive additional CV shares to compensate for the rollover
- GP ownership increases by the value of the rolled carry
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