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ILPA's 'Principles 3.0' Hits the Press
June 28, 2019 | Issue No. 35

“Principles 3.0,” the Institutional Limited Partners Association (ILPA) guidelines for private equity best practices, hit the press yesterday. Subscription facility-related provisions generally had been well-telegraphed. Specific recommendations included the following:

  • Performance reporting during fundraising and over the life of the fund should cover returns with and hypothetically without the use of such facilities.
  • The use of credit facilities with terms longer than one year should be subject to limited partners advisory committee approval.
  • Subscription facilities terms should be disclosed or made available to LPs on request.
  • LPs should be offered the option to opt out of a facility at the onset of the fund.
  • At fund close, or at the facility close, material terms of the facility should be disclosed to all LPs.
  • ILPA is working towards publishing a model LPA.

The subscription facility recommendations are but a subset in a comprehensive set of guidelines. The full publication is available here. We expect to return to the topic with further analysis. 

 

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