17 ILPA Principles 3.0 Fund Term and Structure GP Commitment and Ownership The GP should have a substantial equity interest in the fund. The GP commitment should be contributed in cash as opposed to contributed through the waiver of management fees or via specialized financing fa- cilities. The GP should not be allowed to co-invest in select underlying deals, i.e., “cherry picking”, but rather its whole equity interest shall be via a pooled fund vehi- cle, whose sharing percentage may not decrease. An annual election to increase the co-invest percentage may be permitted. GPs should proactively disclose the ownership of the management company. GPs should notify all LPs if the ownership of the management company changes over the life of the fund. The GP should be restricted from transferring their real or economic interest in the GP in order to ensure continuing alignment with the LPs. LPs should be no- tified of any intent to transfer GP interests to a third party, however small, but in particular where such a transfer may pose a conflict of interest for either the GP or any LP in the partnership. In notifying LPs of the intention to transfer GP interests to a third party, the GP should make clear: 1) the goals and rationale for the transaction, 2) the impact on any distributable and long term cash flows; and 3) how fund- and GP-level economics will change post-transaction, in particular the impact on carried interest distribution among remaining mem- bers of the GP not participating in the transaction. Fund Term Extensions Fund term extensions should be permitted only in one-year increments and limited to a maximum of two extensions. Fund term extensions should first be approved by the LPAC and then proceed only with approval of a super majority of LP interests in the fund. Absent LP consent following expiration of the fund term, the GP should fully liquidate the fund within a one-year period. No fees should be charged after the original term of the fund has ended. If circumstances warrant a fee to incentivize the manager to liquidate any remaining assets, the GP should seek an amendment to the LPA to allow such a fee. Any fee agreed during a fund term extension should take into account the lower expense burden during extension, notably where a GP has raised successor funds. The LPAC, and preferably all LPs in the fund, should be provided notice of a GP’s intention to request an extension as early as possible and at minimum of 1-2 quarters in advance of the fund’s expiration to give LPs/LPACS adequate time to consider what is most appropriate for the portfolio. FUND TERM AND STRUCTURE