With the help of 20 internal and external counsel who comprised the LPA Task Force, including Nossaman’s own Partners Yuliya Oryol and Douglas Schwartz, the Institutional Limited Partners Association (ILPA) has finally published the long anticipated Model Limited Partnership Agreement (LPA) for the private equity industry. This complimentary template can be used by general partners (GPs) and limited partners (LPs) alike to determine investment terms in private equity funds, reducing the cost of negotiating fund documents, and streamlining the investment process.

The document conforms to ILPA Principles 3.0, and includes market terms that fairly balance the interests of both GPs and LPs. Individual provisions within the document can be altered to best suit the needs of either party during negotiations, and provide a framework from which investment discussions can proceed. As a result, it is expected that the need for lengthy side letter agreements will be greatly diminished as well.

According to an ILPA press release, Steve Nelson, CEO, ILPA, explained, “The industry has to date lacked freely accessible model documents that can serve as a baseline for reasonable legal terms and conditions associated with private equity funds. Consequently, the hundreds of LPAs developed each year are the product of bespoke efforts and one-off negotiations that come with excessive cost to both GPs and LPs. We encourage all industry stakeholders to review the ILPA Model LPA and use it as a basis for a more effective process, with the confidence that the provisions therein are supported by the LP community.”

The LPA Task Force ensured that numerous provisions were included in the Model LPA, addressing the following key areas: fund economics; standard of care and exculpation and indemnification; co-investments; governance, control and LPAC provisions; key person and removal provisions; and information and communication access for LPs. The Model LPA is the result of numerous drafts and negotiations that date back to early 2018. With the help of the LPA Task Force, ILPA will continue to release additional versions of the Model LPA, as well as other templates for fund documents going forward, as part of their broader LPA Simplification Initiative.

To download the Model Limited Partnership Agreement (LPA), just click here.