Fostering the proper alignment of interests between limited partners and general partners is a top priority for ILPA. Through the ILPA Private Equity Principles, we promote such alignment with a strong focus on transparency and governance. As issues emerge within the private equity industry, ILPA is committed to responding to requests for guidance to ensure that best practices are encouraged and adopted. These guidance papers may ultimately be incorporated into the ILPA Principles, but may also be published as a standalone document so that LPs and GPs have timely access to the ILPA recommendations.
Subscription Lines of Credit and Alignment of Interests
Short-term financing to bridge the time between a deal closing and the eventual calling of capital has been a tool utilized by private funds for many years. But in recent years, the practice has been expanding in prevalence and scope. In June 2017, ILPA issued released guidance regarding the risks and potential impact on limited partners resulting from these credit lines, as well as recommendations for greater disclosures and clarity in the partnership agreements around parameters for their use.
Model Subscription Agreement (MSA)
In an effort to streamline fundraising, increase clarity and improve the efficiency of capital formation, ILPA today released a model subscription agreement (MSA) for private equity funds in December 2017. Developed by legal counsels representing the private equity industry, the modular, multi-jurisdictional document provides a balanced, off-the-shelf solution which can be easily customized to meet the needs of fund managers and their investors, saving significant time and cost.