The SEC is turning its attention to one of private equity’s favorite financial maneuvers, and the numbers involved are hard to ignore. Manager-led secondary transactions, which include continuation vehicles, hit $106 billion in 2025. That’s up from $70 billion in 2024, a roughly 51% jump in a single year.
Continuation vehicles let fund managers transfer assets from an older fund into a new one, effectively extending ownership beyond the typical fund lifespan. The SEC wants to know whether the terms of these rollovers are fair to all parties involved.
What the SEC is actually looking at
The investigations center on three core issues: conflicts of interest, asset valuation discrepancies, and the adequacy of disclosures made to investors.
When a fund manager moves an asset into a continuation vehicle, they’re essentially on both sides of the transaction. They’re the seller in the old fund and the buyer in the new one. The manager has every incentive to set a favorable price, and limited partners in the original fund may not have enough information to push back.
