No. Existing LPs are not required to roll into the new vehicle. The election process gives each LP a choice about how to handle their interest in the transferred assets.
LPs typically have three options:
- Sell and receive cash at the transaction price
- Roll their interest into the continuation vehicle and remain invested in the assets under the new structure
- Partial election (where available) to sell a portion and roll the remainder
LPs who do not submit an election by the deadline are treated according to the transaction's default provision, which is specified in the disclosure materials. Defaults vary by transaction. Some default to a cash exit, others to a rollover. LPs should review the default carefully and make an active election rather than relying on it.
For more on how the election process works, see the LP Elections in Continuation Vehicles guide.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation. Capital Company is not a law firm and does not provide legal advice.