Upon Further Review: Evaluating a PE Fund Investment

A wide variety of institutions, foundations, and high-net-worth individuals invest in private equity funds, and the largest of these institutional investors have both the resources to engage attorneys and consultants to carry out thorough private equity fund reviews, as well as the leverage necessary to negotiate and effectuate recommended changes to a fund’s terms.

Each prospective investor has certain investment requirements that are non-negotiable, whether relating to fees and expenses, fund transparency and reporting, portfolio construction and/or governance, or other matters. As investor’s counsel, it is critical that you speak with your client and/or its consultants prior to conducting a fund review to understand the client's priorities so you can identify any mandatory points and prioritize negotiations accordingly.

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Related Content

• Fee and Expense Disclosures in Private Equity
  Read this practice note that addresses the ongoing scrutiny by the Securities and Exchange Commission (SEC) on the fee and expense allocation practices of private equity fund managers.

• Investor Remedies
  Review these remedy provisions, which tend to be highly negotiated terms in a limited partnership agreement. Remedies can include key person provisions, termination and removal rights, informational rights, and other terms.

• Term Sheet for a Private Equity Fund
  Consult and customize this form of term sheet that is used to disclose, market and negotiate the terms of a private equity fund.

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