GP-led secondaries: why an LP-friendly fairness perspective is now table stakes

The growth in GP-led secondaries — continuation funds, single-asset secondaries, strip transactions — has produced a corresponding growth in the demand for an independent fairness perspective on the LP advisory committee side. Two years ago, an LP-friendly fairness opinion on a continuation fund was occasionally requested. In 2026, it is almost always requested, and increasingly written into the LPA as a precondition.

Why the LPAC needs an independent reference.

The mechanics of a GP-led secondary place the GP simultaneously on both sides of the trade: the GP is the seller (on behalf of the legacy fund’s LPs) and the GP is the buyer (as the sponsor of the continuation vehicle and, often, with a re-up commitment). The conflict is structural; the GP knows this and the LPs know this, which is why an independent fairness perspective is the standard tool for resolving it.

Importantly, the independent reference is not the same as the GP’s own NAV. The GP’s NAV is a financial-reporting deliverable; the LPAC reference is a transactional deliverable. They use overlapping methods, but the LPAC version typically requires explicit downside calibration, scenario modeling under stressed assumptions, and an articulated view on whether the proposed transaction price is reasonable to a hypothetical arms-length buyer with full information.

What “LP-friendly” means in practice.

• Negotiated independently. The independent valuator’s engagement letter is signed with the LPAC (or with a nominated LP representative), not with the GP. Fees are paid out of the transaction or by the GP, but the reporting line and the deliverable belong to the LP side.
• Multiple scenarios. Held-rule market case (the “what if we just held it” path); downside calibration (the “what if the comparables compress” path); exit-pull-forward (the “what if the GP is right that exit is closer” path). Each scenario is built independently and then triangulated.
• Q&A discipline. The LPAC is entitled to direct Q&A with the independent valuator, and the GP is not present for those sessions. This sounds obvious; in practice, the structural discipline of getting that right is non-trivial.

The market is converging on a standard.

ILPA’s continuation-fund guidance, the SEC’s adviser examination priorities, and increasingly LPA language itself are converging on a similar set of expectations: independent valuation reference, LP-side reporting line, scenario modeling, downside calibration, and an LPAC-direct Q&A right. Funds whose continuation transactions deliver all five run cleanly. Funds that try to retrofit one or more after the fact tend to extend the close by quarters.