If a fund manager passes away or is incapacitated, the fund's Limited Partner Agreement (LPA) typically includes a Key Person Clause. This clause may trigger the fund to enter a 'Limited Operations' mode. In this mode, the fund's activities may be restricted, and the interests of the fund could potentially be distributed to the limited partners based on the terms of the LPA. The specifics of how this situation is handled can vary depending on the terms set out in the LPA.
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If a fund manager passes away or is incapacitated, the fund's Limited Partner Agreement (LPA) typically includes language or provisions addressing this event.
For example, in the Cornerstone LPA published by Decile Group, such an event happening to a "Key Individual" will trigger the fund to enter 'Limited Operations' mode. In this mode, the fund's activities become restricted, it is up to the General Partner entity and the Limited Partners to negotiate to determine what happens next.
The specifics of how this situation is handled can vary depending on the terms set out in the LPA - be sure to read carefully and consult experienced fund counsel for questions regarding a specific set of circumstances.
For example, in the Cornerstone LPA published by Decile Group, such an event happening to a "Key Individual" will trigger the fund to enter 'Limited Operations' mode. In this mode, the fund's activities become restricted, it is up to the General Partner entity and the Limited Partners to negotiate to determine what happens next.
The specifics of how this situation is handled can vary depending on the terms set out in the LPA - be sure to read carefully and consult experienced fund counsel for questions regarding a specific set of circumstances.
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