Glossary Β· Regional
GP-led continuation fund
Definition
A structure where a fund manager moves one or more prized portfolio companies into a new vehicle, giving existing LPs the choice to cash out or roll into the new fund while the manager keeps holding the asset longer.
Why it matters for a secondary
China GP-led continuation vehicles closed 5 deals in 2025, up from 1 in 2024 β the fastest-growing structure in the region, and the mechanism behind HSG's ByteDance vehicle, one of the largest tracked here.
How it works in practice
The manager identifies assets it does not want to sell, raises a new vehicle to buy them from the existing fund, and gives current investors a choice: take cash at the transaction price or roll into the new structure. Secondary buyers provide the capital, an independent valuation usually supports the price, and the manager's own capital and carried interest terms reset in the new vehicle.
A concrete illustration
A regional manager holding a single large position past its fund's life moves that asset into a continuation vehicle capitalised by secondary buyers. Investors who need liquidity take it; those who believe the asset has further to run stay in β and the manager keeps managing the company either way.
What people most often get wrong
The manager stands on both sides of the price. What separates a legitimate continuation fund from a self-serving one is process: an independent valuation, a genuinely competitive price, real time and information for existing investors, and alignment carried forward rather than reset in the manager's favour.
Frequently asked questions
Why are continuation funds growing fastest in this region?
Is rolling into a continuation fund the safe choice?
Orientation for investors and allocators, not legal or financial advice. Rules in this market change β confirm the current position with a licensed adviser in Regionalbefore acting on anything here.