ILPA Issues Guidance on Continuation Vehicles: What Institutional Investors Need to Know

On October 20, 2026, the Institutional Limited Partners Association (ILPA) released Continuation Vehicles: Advancing Alignment through Best Practices, its most detailed statement yet on how GP-led continuation vehicle (CV) transactions should be run. The guidance builds on ILPA's 2023 release and reflects a market in which CVs have moved from a niche end-of-life tool to a mainstream, and often mid-life, exit route to bring liquidity to LPs.

ILPA reiterates what institutional investors have grappled with for some time: a CV is a related-party transaction in which the GP sits on both sides, and the GP bears the burden of showing that the deal serves existing LPs. ILPA expands on this principle with concrete expectations, including a minimum election period of 20 "clear" (i.e., unambiguous) business days, no blanket conflict waivers, independent price validation, and no increase in the overall fee or carry burden for rolling LPs among other things.

For public and corporate pension plans, endowments, foundations, sovereign wealth funds, insurers and other institutional investors, the guidance is both a negotiating benchmark and a prompt to update internal processes before the next election notice arrives.

Why ILPA Acted Now

CVs accounted for roughly 14% of sponsor-backed exits globally in 2025, up from 5% in 2021, according to data cited by ILPA. A prolonged slowdown in M&A and IPO exits has pushed GPs to move assets into new vehicles they continue to manage. GPs also increasingly use CVs mid-life, not just as end-of-life solutions, and ILPA notes that the earlier a CV is proposed, the harder LPs will look at the rationale.

ILPA describes the guidance as principles-based rather than prescriptive. A deal that departs from the guidance is not automatically flawed, but the GP should be ready to explain how LP concerns were otherwise addressed. ILPA's CEO, Jennifer Choi, framed the release as a response to CVs becoming a commonplace feature of private markets that now warrants clearer expectations.

CVs are now a recurring event in most private equity portfolios, so the time to prepare is before an election notice arrives.

For existing fund interests

1. Build a CV response protocol, including an expedited approval path and asset-level (not only manager-level) underwriting, so a 20-business-day window is workable.
2. Confirm GPs have current contacts for your investment, operations, and legal teams so notices are acted on without delay.
3. Review side letters and LPAs for each fund likely to run a CV, including any CV-specific pre-clearance, conflict, or valuation provisions.
4. If you sit on an LPAC, confirm its terms of reference let you raise exit strategy and CV intentions, and request independent counsel where warranted.
5. When a CV is announced, send the GP your expectations on timing, data room access, and disclosure, using the ILPA Continuation Fund Disclosure Template as a request list.
6. Do not sign an election agreement, even to sell, without legal review of its representations, indemnities, waivers, and deemed-election consequences.

For new commitments

1. Add CV questions to manager diligence, including prior CV usage and whether the strategy contemplates recurring CVs (ILPA's Due Diligence Questionnaire 2.0 includes relevant questions).
2. Resist CV-specific conflict pre-clearance terms and scrutinize warehousing and cross-trade provisions in new LPAs.
3. Update standard side letter requests to cover minimum election periods, disclosure no less than the ILPA template, mirror reporting, and tax status assurances on a roll.
4. For co-investment programs, seek clarity on how CV exits will be handled and whether reinvested amounts can keep co-investment economics.