GP & LP Relations Generally
In this article we will explain what other arrangements should the GP make with regard to LP relations.
Explanation
A transparent and trust-based relationship between the LPs and the GP is a key, and this requires good and clear communication throughout the fund’s life.
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Recommendation
Suitable arrangements should be made to respond to queries from LPs promptly as they arise, as well as complying with the obligations in the fund documents on reporting and, if relevant, meetings. The use of due diligence data rooms can be an effective and efficient way to provide information to prospective LPs.
It is recommended that an annual meeting of LPs be held. An annual meeting provides an excellent opportunity for the GP and LPs to meet together in person. There is no fixed agenda for annual meetings. As a guide, however, the general aim should be to update LPs on the progress of the fund(s) and provide an overview of developments in the market, responsible investment issues along with any relevant updates on the GP’s team or processes. It can be helpful to consult with LPs when preparing for the annual meeting to get a sense of the best balance to
be achieved between overview and detail. It is also advisable to inform LPs, subject to confidentiality requirements, of investments and divestments as and when they occur. Where practical, consideration should be given to providing access through video, conference call or other, secure, interactive methods for those LPs who are unable to attend in person.
Regular conference calls or webcasts are an efficient method of keeping all LPs up-to-date between annual meetings. Having a secure area on the GP’s website, or using one of the secure electronic data site providers is an increasingly common way for GPs to make documents and notices available to LPs.
