What is a GP-led secondary / continuation vehicle, why has it boomed, and what conflicts of interest does it create?

In a GP-led secondary, the sponsor sells one or more portfolio companies from an existing fund into a new continuation vehicle that the same sponsor manages, funded by secondary investors; existing LPs choose between cashing out or rolling into the new vehicle. The boom has structural drivers: exit markets (IPO, strategic M&A) were weak, holding periods stretched, LPs wanted liquidity, and sponsors wanted to keep trophy assets rather than sell them cheap. The core conflict: the GP sits on both sides of the trade — as seller (maximizing price for old-fund LPs) and as buyer (minimizing price for the continuation vehicle it will earn new economics on). Mitigants that diligence should verify: a competitive price-discovery process or third-party fairness opinion, LPAC approval, status-quo rollover options with no forced decision under time pressure, alignment via the GP rolling its own crystallized carry into the new vehicle, and transparent new economics (management fee, carry tiers, reset hurdles). ILPA guidance sets expectations here. For candidates the key insight: a continuation fund is not automatically bad — it can be the best owner keeping a good asset — but the price-setting mechanism is everything.