Fund Finance
Definition
Continuation Fund
A GP-led secondary vehicle where selected assets from an existing fund are transferred into a new SPV, with LPs offered liquidity (sell) or rollover (invest in new vehicle). Requires independent fairness opinion (ILPA July 2024 guidance).
Deep Dives
Related Terms
NAV Facility
Loan secured by the net asset value of a fund's investment portfolio. Distinct from subscription line: secured by existing assets (not future capital); used in later fund lifecycle.
DPI (Distribution to Paid-in Capital)
Total distributions to LPs ÷ total capital called. A key fund performance metric improved by NAV-funded distributions — a controversial use case flagged in ILPA guidance.
Special Purpose Vehicle (SPV)
A bankruptcy-remote legal entity created solely to hold assets and issue securities or borrow against those assets. Bankruptcy-remoteness is the defining feature — achieved through limited purpose charter, limited recourse provisions, and non-consolidation opinions.