In recent years, continuation funds have emerged in Australia following strong investor support offshore. This has created the need for a shared set of expectations between LPs and GPs, to provide parameters on a well-run transaction and to promote greater alignment and transparency to enable more informed decisions throughout the transaction process.
To assist Limited Partners (LP) and General Partners (GP) define how these unique transactions to private equity should operate, the Institutional Limited Partners Association (ILPA) recently released new guidance, Continuation Funds: Considerations for Limited Partners and General Partners. The guidance has been developed by ILPA in consultation with LPs, GPs and other industry experts involved in continuation fund transactions.
Australian Investment Council member, Allens, has reviewed the new guidance and produced a detailed account on considerations for LPs and GPs.
The following article has been published with permission from Allens: A leading international law firm
New guidance for continuation fund transactions (allens.com.au)
By James Kanabar and Sean Cole
- Key themes and recommendations emerging from ILPA guidance
- The Institutional Limited Partners Association (ILPA) has released guidance on continuation funds. The guidance, which reflects input from both sponsors and investors, is released amidst the continued deployment of continuation fund structures (also known as General Partner (GP)-led secondaries) by private equity sponsors in an environment where alternative exit options for portfolio company investments remain challenging and where the structuring of continuation funds is attracting interest from regulators globally.
In this Insight, we discuss the key (and in some respects, novel) takeaways relevant to private equity sponsors and Limited Partner (LP) investments teams.
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