Draft Gp Led Secondary Memo

---
name: draft-gp-led-secondary-memo
task_id: funds-asset-management/draft-gp-led-secondary-memo
description: Review GP-led continuation vehicle transaction documents and prepare a structuring memorandum covering legal structure, conflict disclosures, tax and regulatory considerations, and key structural risks for the deal team and investment committee.
activates_for: [planner, solver, checker]
---

# Skill: Draft GP-Led Secondary Transaction Structuring Memorandum

## 1. Subject-matter triage

Use this skill for a GP-led continuation vehicle transaction where the sponsor is proposing to roll one or more assets from an existing fund into a new vehicle and present the structure to the deal team and investment committee.

Before analysis, identify the governing document set, the transaction form, the investor election mechanics, and the approvals or consents that control closing. Treat the existing fund agreement as the baseline authority for consent, conflict, transfer, and fiduciary analysis; treat the continuation vehicle terms as the new economics to be tested against that baseline.

## 2. Failure modes the skill is correcting

- Missing the full conflict package in a GP-led continuation vehicle, including sponsor self-interest, carry crystallization, successor-fund incentives, pricing opacity, and expense shifting
- Treating fairness opinion presence as sufficient without testing independence, compensation, and recurring adviser relationships
- Confusing the consent standard for this type of transaction with ordinary transfer consent analysis
- Failing to map the approvals, filings, and third-party consents that may be needed before closing
- Under-analyzing tax-sensitive rollover issues, including disguised sale risk and tax-exempt investor consequences
- Overlooking ERISA, CFIUS, HSR, and lender-consent issues that can control structure or timing
- Not flagging below-cost valuation questions or unfair allocation of transaction expenses
- Writing a descriptive memo that lists issues but does not tie them to governing authority, source documents, and deal consequences

## 3. Legal frameworks / domain conventions that apply

- **Continuation vehicle structure.** A continuation vehicle is a new fund or special purpose vehicle that acquires designated assets from an existing fund, allowing some investors to cash out while others roll. The memo should explain how the asset transfer, rollover election, and new fee/carry terms interact.
- **Conflicts and disclosure.** The sponsor’s conflicted position must be analyzed under the fund agreement, applicable fiduciary-duty principles, and the transaction disclosure record. Address whether disclosures cover the sponsor’s incentives, the pricing basis, adviser compensation, and any information asymmetry among investors.
- **Consent and approval mechanics.** Identify the precise consent standard in the governing agreement for this transaction type and distinguish it from general transfer or assignment language. If the agreement is not tailored to a continuation vehicle, flag ambiguity and the resulting execution risk.
- **Fairness opinion and adviser independence.** Test whether the opinion provider’s engagement terms, compensation, or prior relationships create an independence concern. If the record uses a fairness opinion, the memo should state what it does and does not resolve.
- **Tax rules.** Analyze disguised sale risk under the partnership tax rules, including timing of contributions and distributions and any structural features that may shift economics. Address UBTI for tax-exempt investors and the conditions under which leverage can create exposure. Address ERISA plan-asset or exemption issues if benefit-plan investors roll.
- **Regulatory and closing approvals.** Consider HSR Act filing obligations, CFIUS sensitivity, SEC/Form ADV update needs, and any lender consent or change-of-control approvals for portfolio companies.
- **Valuation and fiduciary scrutiny.** Below-cost marks, stale valuation support, or uneven expense allocation may create fairness and fiduciary-duty concerns. The memo should connect valuation evidence to the pricing narrative and disclosure record.
- **Authority-first analysis.** For every legal conclusion, identify the controlling statute, regulation, rule, or generally recognized doctrine supporting it; do not state conclusions in bare form.

## 4. Analytical scaffolds

1. **Inventory the source set.** Read the governing agreement, continuation vehicle terms, election materials, conflict disclosures, fairness opinion, valuation support, adviser engagement letters, portfolio summaries, and any approval or consent materials.
2. **Map the transaction architecture.** Identify the assets, the rolling investors, the cashing-out investors, the new vehicle economics, and the closing steps in sequence.
3. **Test the consent path.** Locate the specific approval threshold and any LPAC role, and determine whether the agreement clearly covers a continuation vehicle or leaves ambiguity.
4. **Assess sponsor conflicts.** Separate disclosure issues into pricing, process, economics, sponsor motivation, and allocation of transaction costs. For each, identify the document that addresses it and any gap.
5. **Test fairness opinion integrity.** Examine who provided it, what compensation or repeat work exists, and whether the opinion record is sufficient to support the process.
6. **Run the tax screen.** Analyze disguised sale risk, UBTI exposure, and ERISA qualification using the transaction sequence and investor profile.
7. **Run the regulatory screen.** Check HSR, CFIUS, SEC/Form ADV, and lender-consent triggers, and identify which are condition-precedent risks versus post-closing housekeeping.
8. **Evaluate valuation and expenses.** Compare pricing support to asset performance and cost basis; test whether expenses are allocated in a way that is defensible for both the old fund and the continuation vehicle.
9. **Pull fund metrics only where sourced.** Include vintage, committed capital, deployed capital, realized/unrealized status, and fund performance metrics only if the source documents provide them; do not infer missing figures.
10. **Write the memo as an investment-grade risk note.** Each issue should identify the governing authority, the document hook, the practical consequence, and the action needed to de-risk the transaction.

For any issue discussed, include the scale or trigger it depends on, the related clause or document that interacts with it, and the downstream deal consequence. If only one consent path, investor class, or regulatory trigger is implicated, say so expressly.

## 5. Vertical / structural / temporal relationships

The existing fund agreement governs sponsor authority, investor consent, conflict management, and any LPAC role. The continuation vehicle terms establish the new economics and should be measured against the prior fund for sponsor-favorability, fee reset, carry reset, and rollover treatment.

Sequence matters. The disclosure package and fairness record should be aligned before investor elections are solicited; closing conditions should be mapped against any lender, filing, or CFIUS dependencies that could delay execution; and tax characterization should be assessed on the actual order of contribution and distribution events.

Where multiple investor cohorts, assets, or closing steps exist, analyze them separately rather than as one blended group. If the source documents present only one class or one asset package, state that the analysis is limited to that set.

## 6. Output structure conventions

Produce a single structuring memorandum for the deal team and investment committee in an industry-conventional form.

Use headings that cover, at minimum:
- transaction overview and structure
- consent and approval path
- conflicts and disclosure analysis
- fairness opinion and valuation support
- tax considerations
- regulatory and closing requirements
- expense allocation
- key risks and recommended actions

For each substantive issue:
- state the governing authority or controlling principle;
- identify the document or provision that drives the issue;
- explain why it matters for this transaction;
- state the practical consequence if unresolved.

Use a clear severity or priority signal for material risks, applied consistently throughout the memo.

End with a Recommended Actions section that gives concrete next steps, assigns them to the relevant role, and ties them to the next transaction milestone or filing deadline.