Private Equity Secondaries, Continuation Vehicles & LPAC Governance
GP-Led Continuation Vehicle (CV) Carry Rollover & Alignment
Calculate Legacy Fund Crystallized GP Carry ($M), Selling LP Cash Liquidity Payout ($M), Secondary Lead Syndicate Day-1 Check ($M), and GP Day-1 CV Ownership Alignment (%).
Audit crystallized GP carry rollover—LPACs demand skin-in-the-game, not a conflicted GP cash-out!
In a GP-led Single-Asset Continuation Vehicle (CV), a private equity sponsor transfers a crown-jewel company from an aging legacy fund into a newly formed CV backed by secondary buyers, giving existing LPs a status-quo Roll Option vs a Cash-Out Liquidity Option. Because the GP sits on both sides of the table, LP Advisory Committees (LPACs) and secondary lead underwriters scrutinize how much Crystallized Old-Fund Carry = MAX(0, CV_Transfer_Equity - Legacy_Cost) * Carry_Rate is rolled directly into the CV! Specifically, Net LP Distributable Pool = CV_Equity - Crystallized_Carry, Selling LPs receive Net_LP_Pool * Sell_Pct, Rolling LPs roll Net_LP_Pool * (1 - Sell_Pct), and Secondary Buyers fund Selling_LP_Payout + Unrolled_GP_CashOut!
Verify on a $400.00M Trophy-Asset Continuation Vehicle—Day1_CV_Transfer_Equity = $400.00M (B2), Legacy_Fund_Cost_Basis = $150.00M ($250.00M gain, B3), Old_Fund_Carry_Rate = 0.20 (20.0%, B4 -> Crystallized GP Carry = $50.00M in E2; $350.00M Net LP Pool), Selling_LP_Election = 0.60 (60.0% cash out, B5 -> Selling LP Cash Payout = 350 * 0.60 = $210.00M in E3; $140.00M Rolling LPs), and GP_Carry_Rollover_Pct = 0.80 (80.0% = $40.00M rolled, $10.00M tax cash-out, B6): Secondary Buyer Day-1 Check equals 210 + 10 = $220.00M (55.0% of CV, E4), and GP Day-1 CV Alignment Share reaches 40 / 400 = 10.00% (E5, alongside 35.0% Rolling LPs)!
| GP-Led CV Cap-Table KPI ($400M Transfer, $150M Cost, 20% Carry, 60% Sell, 80% GP Roll) | Formula | Verified Output |
|---|---|---|
| Crystallized Old-Fund Carry ($M) | (CV_Equity_M - Legacy_Cost_M) * Carry_Rate | $50.00M |
| Selling LP Cash Payout ($M) | (CV_Equity_M - Carry_M) * Selling_LP_Pct | $210.00M ($280.00M @ 80% Sell) |
| Secondary Buyer Day-1 Check ($M) | Selling_LP_Cash_M + Carry_M * (1 - GP_Roll) | $220.00M ($280.00M @ 100% Roll) |
| GP Day-1 CV Alignment (%) | ((Carry_M * GP_Roll) / CV_Equity_M) * 100 | 10.00% (12.50% @ 100% GP Roll) |
Continuation Vehicle Secondary Check & GP Alignment Formula
Validate CV_Equity > Legacy_Cost > 0, Carry_Rate in [0, 0.30], Selling_LP_Pct in (0, 1], and GP_Rollover_Pct in [0.50, 1.0]!
=LET(cv_e, B2, cs_0, B3, cr_r, B4, sl_p, B5, gp_r, B6, IF(OR(cv_e <= cs_0, cs_0 <= 0, cr_r < 0, cr_r > 0.3, sl_p <= 0, sl_p > 1, gp_r < 0.5, gp_r > 1), "Invalid CV Structure Input", LET(cr_m, (cv_e - cs_0) * cr_r, lp_s, (cv_e - cr_m) * sl_p, ROUND(lp_s + cr_m * (1 - gp_r), 2))))100% Pre-Tax Carry Rollover Mandate Check (80% LP Sell & 100% GP Carry Roll)
Enforce a strict 100% GP carry rollover mandate (B6 = 1.00) when 80% of LPs elect liquidity (B5 = 0.80): Selling LP Payout E3 is $280.00M, Secondary Buyer Check E4 equals $280.00M (zero cash leak to GP!), and GP CV Alignment E5 rises to 12.50%!
=IF(ISTEXT(E4), E4, ROUND((((B2 - B3) * B4 * B6) / B2) * 100, 2))Try the example
Use the original values or change them to test your understanding.