Continuation Vehicle Financing for GP-Led Secondaries
Financely advises general partners on the debt side of continuation vehicle transactions: facilities at the level of the new vehicle, financing of deferred purchase consideration, and lines that help the GP fund its own commitment. We structure the financing and arrange it with banks, NAV lenders and private credit. Financely is not a lender and does not act as the secondary buyer.
Add the Right Debt to a GP-Led Deal
Share the transaction outline, the assets moving into the vehicle and where liquidity is needed, and we will tell you which facilities are realistic.
Request a free estimate Start your engagementWhere Debt Fits in a Continuation Vehicle
In a GP-led secondary, a fund sells one or more assets to a new continuation vehicle backed by secondary investors and rolling LPs. Debt can appear in three places, and each is underwritten differently.
CV NAV Facility
A facility secured on the assets held by the continuation vehicle, used for follow-on capital, value creation or liquidity. Concentration in one or a few assets is the central credit question.
Deferred Consideration
Part of the price paid to selling LPs later. Buyers and sellers may finance or monetise that deferred amount, which lenders treat as exposure to the vehicle's performance and the buyer's credit.
GP Commitment Financing
Investors typically expect the GP to roll carry and commit new money. GP lines secured on management company cash flows and fund interests can fund that commitment.
Timing Facilities
Short-term facilities that bridge closing mechanics between the existing fund, the new vehicle and investor funding dates.
For fund-level facilities more broadly, see fund finance and NAV lending advisory, GP commitment financing and NAV financing for private equity funds.
What Lenders Test
- Asset concentration. Single-asset vehicles are lent against far more conservatively than diversified pools.
- Valuation support. The price agreed in the secondary process, third-party validation and the asset business plan.
- Cash flow and exit path. Expected distributions, the hold period and how debt is repaid if the exit is late.
- Structure. Where the borrower sits, security over holding entities, transfer restrictions and portfolio company debt.
- Governance. A clean process with LPAC engagement and conflicts managed. The ILPA, Continuation Funds: Considerations for LPs and GPs (2023) sets out the process LPs expect, including a competitive process with third-party price validation and enough time for LPs to decide whether to roll or sell.
Leverage cannot repair a weak process. Lenders and secondary investors both read the LPAC materials. Financing that makes rolling LPs worse off will draw scrutiny.
Information Lenders Ask For
- Transaction summary, rationale and LPAC materials
- Asset business plans, financial statements and portfolio company debt terms
- Valuation support and bids from the secondary process
- Continuation vehicle LPA, subscription documents and investor list
- GP track record, management company financials and KYC documents
- Proposed use of proceeds and repayment plan
How the Process Works
Scope
We identify where debt helps the transaction and where it adds risk.
Structure
We set the borrower, security, sizing approach and repayment mechanics.
Lender Outreach
We approach banks, NAV lenders and private credit with a complete package.
Close
We coordinate diligence and documentation alongside the secondary closing.
Talk to Us About Your Financing
Send the transaction summary, asset information and target timetable for an initial assessment.
Request a free estimate Start your engagementFrequently Asked Questions
Can a single-asset continuation vehicle borrow?
Yes, but lenders size debt conservatively because all value sits in one company. Strong cash generation, valuation support and a clear exit path matter most.
How is a CV NAV facility different from a fund NAV facility?
The structure is similar, but a continuation vehicle is usually far more concentrated and newly priced, so lenders focus on the price set in the secondary process and the asset plan.
Can debt fund the GP's commitment to the continuation vehicle?
Often yes, through a GP commitment facility secured on management company cash flows and existing fund interests, subject to lender appetite and fund document restrictions.
Do we need LPAC approval for the financing?
The transaction itself normally goes to the LPAC because of the conflicts involved. Whether the financing needs separate approval depends on the fund and vehicle documents.
Does Financely buy the assets or provide the loan?
No. Financely advises and arranges financing. Secondary investors buy the interests and lenders provide the debt after their own approval.