Recommendations
Explanation Depending on the size of the investment, GP will typically appoint one or more experienced members of its own staff or representatives to the portfolio company's board. The individuals appointed by GP typically have deep experience in the industry and often have been involved in the initial
Recommendations
Explanation Some portfolio company information will be confidential; the GP should be aware of this, as well as the need to treat company information with due regard to commercial sensitivity and the requirements of the portfolio company's other stakeholders. Recommendation The GP must not disclose information received from
Funds
Explanation If the fund permits the GP, its associates or officers to co-invest or to make parallel investments alongside the fund, there is a potential of creation a conflict of interest for the GP. Recommendation Subject to the provisions of the fund documents, details of co-investment arrangements should be disclosed
Recommendations
Explanation In some jurisdictions, it is common industry practice for different classes of investors to acquire different types of securities, depending on their relative position in the transaction, the type and amount of risk they assume, and the relative value they bring to the investment. Returns for each type of
Recommendations
Explanation Investments made by fund can be structured in many ways. In some cases, the fund may be a passive minority investor in a portfolio company, while in other cases, the fund may gain substantial or even complete control of the portfolio company. In deciding how to structure investments, consideration
Recommendations
Explanation Any decision by a GP to make an investment involves an assessment of the opportunity and an evaluation of the risks compared to the benefits of the opportunity. The information on which this decision is based has usually been gathered and critically evaluated during the due diligence phase within
Recommendations
Explanation A GP should be aware of the risks and opportunities that ESG factors bring to its portfolio companies. The success of an investment may be influenced not only by financial performance but also by other performance criteria. A GP must also take into account its own LPs' approaches
Recommendations
Explanation The due diligence process that the GP conducts prior to investing in a portfolio company is critical. The information obtained during the process, together with GP's own knowledge and expertise, forms the basis for any investment decision. The due diligence process examines a broad range of aspects
Recommendations
Explanation It is important that fundraising does not continue indefinitely as this may prevent GP from implementing the fund's investment strategy while continuing to commit resources to marketing. There may also be time constraints imposed by certain laws and regulations. Between the initial closing and the final closing,
Recommendations
Explanation The fundraising team can make forecasts of likely performance in the fund's chosen sectors, target IRR and money multiplier. However, it is very easy for such material to be misread or mislead potential LPs, particularly in light of changing circumstances or if material is presented selectively. Recommendation
Recommendations
Explanation Prospective LPs will expect detailed track record information to be provided by GP as part of the due diligence process. It is an important part of acting with integrity that the track record accurately represents the past performance of GP and is both complete and accurate. It is possible
Recommendations
Explanation The issue of responsible investment is of great importance to the industry. As society grapples with the sustainability agenda, the consideration and management of ESG opportunities and risks in the investment process is becoming increasingly important for both GPs and LPs to ensure the long-term performance of investments. In