Continuation Funds Clause Samples
A Continuation Funds clause outlines the terms and conditions under which an investment fund may transfer its assets to a new fund, often managed by the same general partner, to extend the investment period or provide liquidity to existing investors. This clause typically details the process for valuing assets, obtaining investor consent, and managing conflicts of interest that may arise during the transfer. Its core function is to facilitate the orderly transition of assets, offering flexibility for both fund managers and investors while addressing potential issues related to transparency and fair treatment.
Continuation Funds. The General Partner and its Affiliates may establish one or more funds, vehicles, accounts or other arrangements (each a “Continuation Fund”) for purposes of acting as a continuation vehicle with respect to the Partnership and holding long-dated or evergreen investments, among other purposes. The Partnership may sell (or otherwise structure the transfer of) one or more its assets, including any subsidiaries, to any such Continuation Fund; provided that the consideration for such sale has been validated pursuant to: (a) a valuation by the AIFM or another independent appraiser, (b) if, at a reasonably contemporaneous time, a third party is selling at least one-third of the same class of interests in such investment, the sale price being consistent with such third party’s sale price, or (c) a competitive auction (each of the foregoing, a “Price Validation”) provided, further, that the General Partner, notwithstanding anything to the contrary, may cause the Partnership to sell such asset at a price based on such Price Validation method (and on such other terms that are determined by the General Partner to be fair and reasonable to the Partnership), unless a Majority-in-Interest objects in writing to such sale within ten (10) Business Days after the General Partner has submitted a memorandum generally describing the transaction and support for such Price Validation to the Limited Partners, in which case the General Partner shall put such matter to the Limited Partners for a formal vote; and provided, finally, that subject to certain legal, tax, regulatory, accounting, political, national security or other similar reasons, Limited Partners shall be offered the right to participate in any such Continuation Fund pro rata based on their Sharing Percentages with respect to the assets being sold (or otherwise transferred or contributed) to such Continuation Fund.
Continuation Funds. The General Partner and its Affiliates may establish one or more funds, vehicles, accounts or other arrangements (each a “Continuation Fund”) for purposes of acting as a continuation vehicle with respect to the Fund and holding long-dated or evergreen investments, among other purposes. The Partnership may sell (or otherwise structure the transfer of) one or more its assets, including any subsidiaries, to any such Continuation Fund; provided that the consideration for such sale has been validated pursuant to (a) the consent of the Investor Advisory Committee, (b) a valuation by the AIFM or another independent appraiser, (c) if, at a reasonably contemporaneous time, a third party is selling at least one-third of the same class of interests in such investment, the sale price being consistent with such third party’s sale price, or (d) a competitive auction (each of the foregoing, a “Price Validation”) provided, further, that any Price Validation, other than as listed in clause (a) above, shall be submitted to the Investor Advisory Committee, and thereafter the General Partner, notwithstanding anything to the contrary, may cause the Partnership to sell such asset at a price based on such Price Validation method (and on such other terms that are determined by the General Partner to be fair and reasonable to the Fund), unless a majority of the members of the Investor Advisory Committee objects in writing to such sale within ten (10) Business Days after the General Partner has submitted a memorandum generally describing the transaction and support for such Price Validation to the Investor Advisory Committee, in which case the General Partner shall put such matter to the Investor Advisory Committee for a formal vote; and provided, finally, that subject to certain legal, tax, regulatory, accounting, political, national security or other similar reasons, Limited Partners shall be offered the right to participate in any such Continuation Fund pro rata based on their Sharing Percentages with respect to the assets being sold (or otherwise transferred or contributed) to such Continuation Fund.