ILPA convened the legal community twice in October—first for the fifth year of the Private Equity Legal Conference in Washington, D.C., and again in London for an inaugural European LP Legal Community Gathering.
ILPA’s Legal Advisory Council, along with ILPA’s General Counsel Genie Cesar-Fabian, organized the programming of both events, which zeroed in on the latest in fund terms, side letters, LPACs, alternatives liquidity and org expenses, and AI.
Members of the ILPA Legal Advisory Council
Both events also featured candid fireside chats with industry experts —attorney and former member of the Hong Kong Legislative Council Dennis Kwok offered valuable insights on doing business in the current geopolitical landscape (particularly with respect to China), while Financial Times Reporter Alexandra Heal provided her perspective on covering PE and private credit from a UK vantage point.
ILPA General Counsel Genie Cesar-Fabian Fireside Chat with Dennis Kwok
Both events also featured candid fireside chats with industry experts —attorney and former member of the Hong Kong Legislative Council Dennis Kwok offered valuable insights on doing business in the current geopolitical landscape (particularly with respect to China), while Financial Times Reporter Alexandra Heal provided her perspective on covering PE and private credit from a UK vantage point.
Couldn’t join this year’s gatherings in Washington or London? Here are a few takeaways—and plan to join us at LCON next September 25 – 26, 2025.
Fund Terms Haven’t Improved Much for LPs, Despite the Current Environment
There are a range of factors impacting today’s fund landscape. 60 percent of LCON attendees reported fund terms have remained largely status quo over the last year, or they’ve slightly favored GPs. The remaining 40 percent said they’d experienced only slightly better terms.
Source: ILPA Legal Conference
Attendees referenced factors like fear of losing an allocation and GP counsel citing terms accepted in connection with prior funds – regardless of prior sponsor – as continued barriers to negotiating better terms.
At the same time, there are LP-originating factors are at play, including the feeling that LP demands are too fragmented and that there is significant internal pressure to conclude an investment.
Attendees say they’ve been able to successfully negotiate terms like stronger/clearer key person clauses, reporting requirements, and LPAC seats (which attendees maintain as critical), but other terms, particularly around improving alignment of interest around responsibilities for covering organization expenses, remain elusive.
The Org Expense Structure Continues to Set LPs Up for Tough Negotiations
Panelists and attendees agreed—the organizational expense structure is rife with conflicts of interest, and are a key challenge in negotiating contracts. It’s easier said than done to ‘vote with your feet’ in these transactions, according to attendees; many reported achieving better results in negotiations by ensuring the business lead from the GP side remained in the loop with any challenges with Fund Counsel. This will continue to be a focus for ILPA and its members.
Source: ILPA Legal Conference
The Rise of NAV Facilities and Other Creative Financing Options Creating Complexity
With the current macro environment, LPs are seeing the use of NAV-based facilities continue to rise; panelists estimated at least $100 billion in 2024.
And while the LP-side attorneys at LCON said they understood and permitted their use, they are concerned that GPs are using NAV-facilities as a tool for financial engineering rather than value creation.
Attendees agreed that transparency to all LPs in the fund around their use should be standard—in line with ILPA’s guidance released earlier this year.
Legal Tech Is Getting More Sophisticated, But LP Counsel is Approaching with Caution
Many technologies are being built for use in legal tech and getting more sophisticated, according to AI experts on a LCON panel. While LCON attendees said they’d be most open to using AI for contract reviews and summaries, they are approaching these technologies with caution, largely due to concerns over privacy and security.
There’s an Opportunity to Strengthen the LP Legal Community
In the year ahead, the LAC and Cesar-Fabian will continue to look for opportunities to strengthen the LP-side legal community, including through events like the inaugural European LP Legal Community Gathering.
“LP-side counsel seems to have fewer opportunities to build a robust legal community as our GP-side counterparts,” said Cesar-Fabian in her remarks to LCON attendees. “This realization helped solidify my focus on ILPA’s goal of building stronger community and communication among LP counsel.”
Looking to get more involved in this area of ILPA? Reach out to Genie Cesar-Fabian.
