The Continuity Vehicle

A continuation fund is a new fund that buys one or several holdings from a fund that is reaching its term. The holdings are the portfolio companies the manager wants to keep for longer, and the manager stays in charge of them in the new fund. Investors in the old fund who need cash sell at a tested price, and the others keep their interest through the new fund.

Continuation funds are still rare in Korea's venture market, because investors are wary when a manager sells a company from one fund to another. The Ministry of SMEs and Startups now encourages continuation funds, and the Continuity Vehicle answers that concern with an independent test of every price.

The Continuity Vehicle is the product Saint Clair's Practice uses to build a continuation fund with you. The Practice builds the new fund under Korean law, from a model written in advance to the international standard. Your firm then manages the new fund, and an international investor can commit capital to it on the terms that investor already uses.

Each investor chooses. Investors who need cash leave at a price an independent valuer has tested, while investors who believe in the portfolio companies keep their interest.

The companies you keep get the time they need to grow. Your firm goes on managing those portfolio companies for the years they still need. You avoid selling them early only to meet the old fund's term.

Your new fund can raise capital from abroad. Today, international investors provide only 1 to 2 per cent of the capital in Korean venture funds (Saint Clair, Reaching Term, 2026). A fund built on the terms they already use is a fund they can invest in.

Your investors see a fair process. The Continuity Vehicle follows the four conditions that investors ask of a continuation fund (Institutional Limited Partners Association (ILPA), continuation-fund guidance, May 2023):

• An independent party tests the price.
• The investors see the bids.
• Each investor makes a real choice between selling and staying.
• The manager moves its own profit share into the new fund.

You can take part in the new programmes. The Ministry of SMEs and Startups is revising the rules of the mother fund, the government's fund of funds for venture capital. Under the revised rules, the mother fund can choose to reinvest when a manager forms a continuation fund (Money Today, 26 August 2026). The securities industry's joint secondary fund plans to start investing in early 2027, and continuation funds are among its planned purchases (Aju Business Daily, 8 October 2026). A manager with a continuation fund built on the Continuity Vehicle can propose that fund to both programmes when they begin.

Built directly from the international standard in conformity with Korean law. A Korean continuation fund usually starts from the domestic standard fund agreement. The Continuity Vehicle starts from the terms international investors already use, under ILPA's guidance and the International Private Equity and Venture Capital Valuation Guidelines. Korean counsel ensures the terms conform to Korean law. Japan's Ministry of Economy, Trade and Industry took a similar step in June 2025. The ministry published a native English version of its revised model fund agreement, because foreign investors hesitated over translated agreements.

A model, ready before your first conversation. The Continuity Vehicle is a fund model, built in advance to the international standard and written to conform to Korean law. When you call, Saint Clair's Practice configures that model for your fund.

Made for venture funds. In Korea, continuation funds have so far been built for large private equity funds, one deal at a time, with banks and large law firms. Hahn & Co built one in 2022, and IMM Private Equity is forming one in 2026 (Private Equity Wire, 26 July 2022; Financial News, 6 October 2026). In our research in October 2026, we found no firm in Korea or abroad that offers venture managers a continuation fund as a ready product.

One standard from start to finish and beyond. Saint Clair's Practice works with your firm from the configuration of the new fund through its operating years. At every stage, the Practice measures the fund against the international standard.

The assessment. Saint Clair's Practice assesses Korean funds and holdings against the international standard through The Blueprint.

The research. Saint Clair publishes Reaching Term, its annual report on Korean venture holdings: their supply, their buyers and their price.

The price. The Practice negotiates the price on your side, and an independent valuer, who reports to the old fund's investors, checks it.

The plan and the structure. The Blueprint gives your firm a plan for each fund. Where the plan provides for a continuation fund, the Practice builds that fund with you from the Continuity Vehicle.

Funds extend. Korean venture funds are extending three times as often as they leave the fund register of the Korea Venture Capital Association. The register recorded 182 extensions against 60 departures between 18 June and 1 October 2026 (Reaching Term). An extension gives the manager time, and the time leads to a sale only if the holding is made ready for a buyer.

Korean buyers can take only part of the supply. Korean buyer capital covers only about a fifth of what the funds reaching term by 2030 still hold, with every pledge made in 2026 counted (Reaching Term). The rest needs a buyer from abroad, or more time.

Sales close below the last round. The secondary sales on record closed below the price of each company's last funding round (Reaching Term; Dealsite, 22 June 2026; Numbers, 22 September 2026). A manager who waits to sell at the fund's term must often accept a price of that kind.

Write-downs are already large. Funds backed by the mother fund wrote down KRW 1.07 trillion across 733 companies in 2025, after KRW 1.10 trillion in 2024 (Asia Economy, 29 September 2026). Each write-down lowers the value a fund reports to its investors, and could damage the manager's reputation.

Mergers and acquisitions are rare. In 2025, mergers and acquisitions made up 2.3 per cent of what funds backed by the mother fund recovered. The share in the United States was 47.3 per cent (Money Today, 26 August 2026). Mergers and acquisitions will therefore absorb only a small part of the holdings at term.