19 ILPA Principles 3.0 Key Person Identification and Changes to Key Person(s) The investment team is a critical consideration in making a commitment to a fund. Accordingly, any significant change in that team should allow LPs to reconsider their decision to commit, through the operation of the key person provisions. Key persons should be the individuals that will deter- mine the investment outcomes of the fund—not solely the founders, regardless of the title they have. Sound succession planning and smooth transitions in firm ownership are critical to the long-term success of the manager and GP-LP alignment; GPs should work to ensure orderly planned and unplanned transitions of key persons and make transparent to LPs once successor candidates have been identified. LPs should be notified in a timely manner of any personnel changes, not solely key person, with the potential to impact fund performance, and immedi- ately notified when key person provisions are tripped. Changes to key person provisions should be approved by majority of interest of LPs. The key person should not be so broadly drafted such that departures of individuals reasonably believed to be key people would not trigger the provision. When departures of individuals listed as key people do occur, whether or not it triggers a suspension, the ramifications should be discussed in full with LPs, or at minimum the LPAC. Time and Attention Key persons should devote substantially all their busi- ness time to the fund, its predecessors and successors within a defined strategy, and its parallel vehicles. Situations impacting a principal’s ability to meet the specified “time and attention” standard as delineated within the LPA should be disclosed in a timely manner to all LPs and discussed with, at a minimum, the LPAC. Key persons for the fund, as identified in the LPA, must not act as a GP for a separate fund managed by the same firm with substantially equivalent invest- ment objectives and policies until after the investment period ends, or the fund is invested, expended, committed or reserved for investments and expenses. LPs should consider how the key person provisions would operate, if at all, following the end of the in- vestment period, as the harvest period may present the most critical time for continuity of key persons in order to maximize the value of unrealized assets and managing dispositions. Key Person Triggers and Process to Resolve A “key person” or “for cause” event, e.g., fraud, material breach of fiduciary duties, material breach of agreement, bad faith, gross negligence, illegal activi- ties etc., should result in an automatic suspension of the investment period, to become permanent within 180 days, unless and until a defined super majority of LPs affirmatively vote to reinstate. In the event of an investment period suspension trig- gered by the key person provision, the GP should not otherwise use fund assets, including recycling of capital or borrowing against fund assets or uncalled commitments, to make new investments or other expenditures, unless expressly permitted to do so by the LPA. The decision to close a deal committed to prior to a key person event should made in consulta- tion with the LPAC. Any such vote to reinstate the investment period or to remove the GP should exclude the LP interests held by the GP or its affiliates. As a matter of course, on the occurrence of a key person event, an interim clawback test should be performed and satisfied if there is a deficiency. KEY PERSON