A thorough review of the terms and conditions of the limited partnership agreement (LPA) is a vital part of the due diligence that any investor considering investing in a private equity or venture capital fund should undertake. In the wake of the 2007-08 Global Financial Crisis, the due diligence process has become more important and focused as Investors re-evaluate relationships and reconsider their approach to fees, carry and disclosure. Examining the details of the partnership agreement, and negotiating items of concern with the GP, is as much a step in the due diligence process as analysing the GP’s track record or taking references.
To examine the area of legal due diligence in depth, PEI asked a panel of distinguished fund formation experts to comment in a number of issues, including whether investors are paying more attention to legal due diligence, whether there are substancial differences between different classes of investors, and which areas are causing concern to LPs.
The panel consists of leading legal private equity and venture capital fund formation experts from the US, the UK, Germany and Asia. Between them, they have many years of experience in structuring funds and drafting terms and conditions globally. Their experience relates to all types of private equity and venture capital funds and all types of investors in such vehicles. The panel members are:
- Craig Dauchy, Cooley
- Dean Collins and Albert Tse, Dechert
- Uwe Bärenz and Tarek Mardini, P+P Pöllath + Partners
- Duncan Woollard, Paul Hastings
- Robin A. Painter, Proskauer
This panel discussion was first published in Private Equity Fund Investment Due Diligence by PEI in November 2016.
Read the complete panel discussion: PEI_Legal due diligence panel discussion