Document management provider InCloudCounsel has announced the launch of Insight, a platform for managing fund obligations, turning documents like side letters, limited partnership agreements and most favored nation elections into actionable data.
“Fund documents are the most complex set of documentation that our customers deal with,” says Troy Pospisil, chief executive and co-founder of InCloudCounsel.
“With Insight, fund managers can decrease risk for regulatory exposure and fines, eliminate the need to reference multiple compendia and drive accountability across various functions in the organization.”
Insight was born out of the firm’s core business offering: helping to negotiate and manage key, routine legal documents, such as non-disclosure agreements.
“As a standard part of our core business, we have always pulled key terms out of those contracts that we negotiated on behalf of our customers,” says Miles Chan, vice-president and general manager of the Insight platform. “A lot of customers have said, ‘We love this idea of pulling key terms out of documents you negotiated for us. We also think this is widely applicable to contracts you didn’t negotiate for us.’”
The firm doesn’t negotiate LPAs, side letters and other complex fund commitment documents; an area of service already well-covered by the big law firms in the industry.
How it works
The first part of the Insight offering operates similarly to the firm’s core business in pulling key terms and obligations out of client contracts.
“That opens up a whole world of possibilities around being able to organize that data, manage it, ensure compliance, and maintain an audit trail of all of the workflows on that data,” says Chan.
InCloudCounsel employs a bench of experienced fund attorneys, who’ve largely negotiated fund documentation at some of the big firms and will be responsible for pulling the specific data out of the documents and uploading it into the Insight platform, adds Chan.
But for larger managers who may have their own in-house team of fund attorneys, InCloudCounsel still enables them to pull the information themselves and upload it into the Insight interface.
A third option for use, says Chan, is to plug a firm’s outside counsel into the Insight system. This would allow them to avoid having to creating spreadsheets for particular funds or investors’ obligations, instead enabling them to plug the individual data points into Insight and export them back into an Excel document.
“They can get to that old-school output style if they want to, but of course, have all the added functionality that the software system allows,” Chan adds.
The software will continue to evolve, Chan says, but the ability for fund managers to start organizing and managing their obligations is already in place. The firm has next set its sights on helping GPs to communicate consistent language to all of its LPs.
“There’s a big benefit to GPs providing the exact same word for word piece of language across LPs,” Chan says.
“What we’re going to allow our customers to do is natively redline all of the different provisions that are given to LPs for a single obligation, allowing GPs to scientifically understand where there are actual differences in the language.”
Insight has already launched, with around half of its users coming from existing clients, and roughly half from new clients, which, Chan says, speaks to the acuteness of the problem Insight is seeking to address, as well as the lack of other solutions presently addressing it.