Continuation vehicles draw scrutiny as ILPA issues 2026 governance guidance
With CVs making up 87% of GP‑led secondary activity, ILPA’s new guidance tackles conflict management and pricing integrity amid rising litigation risks like ADIC v. EMG.
Continuation vehicle (CV) transactions account for roughly 87% of GP‑led secondary market activity in H1 2025, per HUB International. Sponsors use fairness opinions—often differing from public‑company opinions—to address conflicts arising from dual roles as buyer and seller. The 2025 ADIC v. EMG case exposed procedural gaps (inadequate notice, asymmetric disclosure, valuation missteps) that can trigger lawsuits. In response, ILPA issued a Jan 2026 Continuation Fund Disclosure Template and a Jun 2026 Continuation Vehicle Guidance, setting voluntary benchmarks for conflict management, pricing integrity, and process transparency. Though non‑binding, these guidelines are reshaping LP/LPAC expectations and influencing deal design. Firms advising private‑equity sponsors, investors, and lenders should track adoption, watch for litigation testing of fairness opinions, and prepare for tighter disclosure norms in CV structures.