Private Fund Side Letters: Negotiating and Drafting Key Terms, Financing and Other Concerns
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will discuss the documentation of side letters between private fund managers and investment partners who need or demand terms that may vary from the underlying partnership agreement. The panel will examine most favored nation (MFN) clauses, transfer rights, excusal rights, special reporting provisions, and other terms common to these arrangements. The panel will also discuss the potential administrative and legal ramifications of side letters that fund sponsors must consider before entering into side letters.
- Introduction to side letters and circumstances under which they arise
- Common terms
- Excusal rights
- Enhanced reporting
- Factors to consider in a negotiation
- Credit facilities
- Regulatory concerns
- Impact on fund management: need for consistency
The panel will review these and other critical issues:
- When are side letters typically requested in a fund-raise, and why are they often preferable to an amendment of the partnership agreement?
- How do MFN rights impact the ability of the fund manager to negotiate side letters?
- What are the most common points of contention concerning transfer rights? Excusal rights? Increased reporting obligations?
- Why is an understanding of any existing or future fund financing arrangements necessary when entering into side letters?
Cody J. Vitello
Mr. Vitello concentrates his practice on legal, regulatory, compliance and governance matters applicable to investment... | Read More
Mr. Vitello concentrates his practice on legal, regulatory, compliance and governance matters applicable to investment advisers, family offices, institutional investors, registered investment companies and unregistered private investment funds, including private equity, venture capital, real asset, hedge and real estate funds, funds of funds and hybrid vehicles. In this capacity, he regularly works with clients to structure and document U.S. and offshore private investment fund complexes, negotiates joint venture and other strategic relationships, and advises clients on U.S. federal and state investment adviser registration, regulation, compliance, operational and other matters.Close
Matthew (Matt) Posthuma
Ropes & Gray
Mr. Posthuma is a partner in Ropes & Gray’s private investment funds group in Chicago who focuses on the... | Read More
Mr. Posthuma is a partner in Ropes & Gray’s private investment funds group in Chicago who focuses on the formation of private investment funds and other transactions involving real estate companies, asset managers and financial institutions worldwide.Close
Adam S. Tope
DLA Piper LLP (US)
Mr. Tope provides investment fund sponsors, investors and principals with creative, commercial and realistic advice... | Read More
Mr. Tope provides investment fund sponsors, investors and principals with creative, commercial and realistic advice relating to fund formation and secondaries transactions. He brings a global perspective to his clients, having represented managers and investors in dozens of jurisdictions. Mr. Tope's sponsor-side clients regularly include prominent secondaries firms, private equity and hedge fund managers, real estate managers, middle market managers and startup managers/spinouts. He advises these clients with entity formation, introductions to service providers, discussions with placement agents, drafting of offering memorandums, negotiations with investors and Investment Advisers Act and Investment Company Act compliance, as well as guidance on ongoing operational funds. Mr. Tope has extensive experience with secondaries transactions including GP-led restructurings, tender offers, stapled secondaries and sales and purchases of significant pools of fund interests. Adam also draws on his experience as a former computer programmer to advise fund managers forming cryptofunds.Close