Continuation Vehicles: The Regulatory Lens and Real-World Pain Points

Ropes & Gray asset management partner Colleen Meyer hosted a fireside chat with Katherine Bryan, Associate General Counsel and Chief Compliance Officer at Madison Dearborn Partners, at the PEI Regulatory Compliance Forum on June 9 in Washington, D.C. The discussion covered the regulatory landscape and real-world compliance pain points associated with continuation vehicle transactions, including Limited Partner Advisory Committee (LPAC) consent processes, lessons from recent litigation, Form PF reporting, and practical tips for compliance professionals. Here are some key takeaways.

Ensure disclosures to the LPAC are fulsome and provide sufficient review time with a written record

• The basics: In line with an adviser’s disclosure-based fiduciary duties, CV transactions require disclosure and consent for conflicts of interest, with the LPAC serving as the primary consent mechanism..
• A recent case: In the recent ADIC v. EMG litigation, ADIC challenged a CV transaction on the grounds of flawed information—specifically, asymmetric disclosures—and a flawed process due to a compressed timeline for the LPAC consent. The arbitrators ruled in favor of EMG on March 3, 2026, and the transaction closed on March 25, 2026.
• Additional guidance: Involve the LPAC early and often and maintain a consistent narrative across those who sit on differing sides of the transaction. The heightened level of disputes in this space makes it all the more important for compliance teams to have a structured playbook, maintain thorough documentation, and engage proactively with deal teams from the outset.

Fairness opinions, as well as conflicts associated with expense allocation, remain a significant areas of focus for compliance teams

• Valuation is critical to the LPAC consent process. The SEC signaled as much in the now-overturned Private Fund Adviser Rules, and the market has followed—approximately 90% of CV transactions since 2023 have involved a fairness opinion.
• When it comes to conflicts of interest, key considerations include identifying and organizing the different conflicts, determining when the facts are sufficiently stable to approach the LPAC without compressing the review timeline, and understanding the compliance function's role beyond LPAC consent.

Form PF Section 6 quarterly event reporting is required for adviser-led secondary transactions

• Even though its elimination has been proposed, the filing is still currently due within 60 calendar days after the end of the fiscal quarter in which the transaction closes.
• The definition of what constitutes an event is broad. It covers any adviser-initiated transaction that offers investors the choice to sell all or a portion of their interests in a private fund, or to convert or exchange their interests for interests in another vehicle advised by the adviser or its related persons.

Please reach out to your regular Ropes & Gray contact or reach out to us if you would like to discuss any of the topics outlined above.