ILPA unveils deal-by-deal model LPA

The Institutional Limited Partners Association (ILPA) has released its second publicly available “deal-by-deal” model limited partnership agreement (DBD LPA) for private equity.

This latest model comes off the back of strong demands for a template to use for a DBD structured agreement. According to ILPA’s CEO Steve Nelson, the model will enable GPs to reduce their fundraising time and cost as they structure new funds.

The DBD model LPA aims to help lower the complexity, time and cost of negotiation. It also aims to provide further flexibility for GPs, especially emerging managers by providing an additional waterfall distribution option. The model was created by 20 internal and external counsels representing both the GP and LP communities in the fund formation process.

Additionally, ILPA published a term sheet for the DBA LPA, summarising the terms of the agreement.

“This new Model LPA version is a helpful addition to provide more options to GPs in the marketplace and therefore promote wider adoption for the benefit of all industry participants,” said ILPA’s senior policy counsel Chris Hayes. “The publicly available nature of our templates is meant to address the obvious challenges associated with the confidentiality restrictions typically imposed upon fund documents.”

This latest development comes after ILPA revealed its first publicly available model “whole of fund” waterfall LPA last October, as a way to standardise the fundraising process across the industry, while aligning GPs and LPs. The whole of fund Model LPA was updated earlier this month.