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ILPA Issues Model Subscription Agreement For Private Equity Funds

In an effort to streamline fundraising, increase clarity and improve the efficiency of capital formation, the Institutional Limited Partners Association (ILPA) today released a model subscription agreement (MSA) for private equity funds.  Developed by legal counsels representing the private equity industry, the modular, multi-jurisdictional document provides a balanced, off-the-shelf solution which can be easily customized to meet the needs of fund managers and their investors, saving significant time and cost.  The ILPA MSA is available to the industry on the ILPA website.

“In speaking to private equity stakeholders about legal procedures in need of streamlining, the fund closing process was at the top of the list for constructive disruption,” said Chris Hayes, Director of Industry Affairs, ILPA. “Both LPs and GPs agreed that a standard MSA would provide comfort to investors while eliminating the need for managers to re-create this core agreement and drive up legal costs for each and every fund.  We are tremendously pleased with the result of our collaboration, and encourage the industry to take advantage of the work that was completed on their behalf.”

The standard MSA provides certainty of legal language for LPs applying to invest with fund managers, accelerating the fundraising process by reducing review time for both parties. It also eliminates extraneous information that has crept into subscription agreements in recent years, returning the document to its core purpose.  The MSA includes various bracketed provisions and removable schedules which make it customizable based on the particular requirements of the fund, including the respective jurisdictions of the GP and the LPs subscribing to the fund.

Led by Mr. Hayes, the working group that developed the document included 30 attorneys representing investors and fund managers on a global basis.  The final document reflects additional input solicited from more than 60 attorneys outside the working group. Working group members include: James O’Donnell, DLA Piper UK; Semma Arzapalo, Pillsbury Winthrop Shaw Pittman LLP; Todd Boudreau, Foley & Lardner LLP; Edward Klees, Hirschler Fleischer; Anna Marie Larson, K&L Gates LLP; Adam Lippiett, Siemens AG; Mark Mezey, IFC; Yuliya Oryol, Nossaman LLP; and others.

The MSA, which represents the first in a series of model documents and best practices to be produced through ILPA’s Limited Partnership Agreement (LPA) Simplification Initiative, is available for download immediately.