Continuation vehicles are no longer exceptional. Stop drafting them that way.

When the first continuation vehicles were being negotiated, they were treated as extraordinary events requiring an extraordinary process. That framing made sense at the time. It no longer describes what is happening: for many managers, a sponsor-led secondary is now an ordinary tool of portfolio management, used more than once in a fund's life.

The documentation has not caught up. The conflicts process is still frequently assembled in the two weeks before a consent solicitation, and advisory committees have started to say so.

The complaint is about sequence, not price

In our experience, advisory committees rarely object to the valuation itself. They object to being asked to approve a valuation they had no part in commissioning, at a point in the process where refusing would collapse a transaction that has already consumed months of the manager's time.

That is a sequencing problem, and it is entirely avoidable. Where the valuation adviser is appointed by the committee rather than the sponsor, and its scope is agreed before any buyer is approached, the same valuation produces a materially different reception.

Disclose more than is required

Conflicts disclosure works best as a standing document maintained from the start of the process, listing every economic interest the sponsor and its personnel hold in the continuing vehicle — including the ones that would not, strictly, require disclosure.

The marginal disclosure costs nothing. Its absence, discovered later by an investor comparing documents, costs the manager the benefit of the doubt on everything else.

Rollover economics should not require a spreadsheet

The most common source of post-transaction complaint we see is an investor discovering that electing to roll produced worse economics than electing to sell, in a way that was disclosed but not apparent.

Where rolling investors receive the same terms as new capital, the election becomes a straightforward decision about exposure rather than a puzzle about fee drag. Managers who have adopted this approach report materially higher rollover rates, which is the outcome they wanted from the structure in the first place.

What to build once

Managers who expect to run these transactions repeatedly should build the process once and reuse it, rather than reconstructing it each time under time pressure.

• A standing appointment protocol for the valuation adviser, agreed with the advisory committee outside any live transaction.
• A conflicts register maintained from the first internal discussion, not from the launch of the process.
• A default position that rollover economics match new capital, departed from only with an explained reason.
• A consent timetable that allows the committee a genuine opportunity to instruct its own counsel.