Tear Sheet: Rethinking Costs in Private Equity Fund Formation

ILPA’s tear sheet is designed to highlight the best practices for LPs, GPs, and outside counsel to provide a practical, market-informed framework for all parties involved in the fund formation process to address rising organizational expenses by setting clearer expense caps, ensuring equitable cost‑sharing when budgets are exceeded, and increasing transparency around legal fees and budgeting. The aim is to address rising organizational expenses in private equity fund formation by responding to growing concerns among Limited Partners (LPs) about cost escalation, limited transparency, and insufficient accountability during the fund formation process.