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.

Private equity assets don’t trade on public exchanges. Instead, valuations are often determined by the fund managers themselves or by third-party appraisers they select. The SEC appears concerned that some of these valuations may not reflect genuine market conditions.

Investors in these funds are supposed to receive clear, comprehensive information about the terms of continuation vehicle transactions. The question is whether that’s actually happening.

No specific firms or funds have been named in the probe. This suggests the SEC is conducting a broader sweep of industry practices rather than targeting individual bad actors.

The scale of the problem

Through early May 2026, continuation funds alone raised $11.86 billion across 20 different vehicles.

Private equity firms are sitting on more than 30,000 unsold portfolio companies. The traditional exit routes, IPOs and strategic sales, have been inconsistent in recent years. Continuation vehicles offer fund managers a way to hold onto promising assets while returning some capital to investors who want liquidity.

Why crypto investors should pay attention

The SEC’s investigations do not involve any cryptocurrency-specific entities or tokens. But the SEC’s stance on disclosure, conflicts, and valuation in traditional private equity will almost certainly inform how it approaches similar structures in crypto. If the SEC establishes new standards for how continuation vehicle transactions must be disclosed, or how asset valuations must be conducted and verified, those standards could become the baseline expectation for any managed investment product.

The SEC’s investigation could lead to enhanced disclosure requirements that give limited partners more visibility into how continuation vehicle transactions are priced and structured. The risk for fund managers is that stricter rules could slow the continuation vehicle market, potentially pushing some managers toward traditional exits and putting pressure on valuations for the 30,000-plus portfolio companies currently waiting for an exit.