The model limited partnership agreement launched today by the Institutional Limited Partner Association seeks, among other things, to reverse the trend of “contracting away fiduciary duty” in private equity LPAs. So says ILPA’s senior policy counsel Chris Hayes in the above podcast.
“Our members have been concerned about the increased prevalence of contracting away fiduciary duty in the limited partnership agreement,” Hayes told Private Funds CFO. “We think this undermines the trust in the relationship between the GPs and LPs and that it is core that there be a duty of loyalty and duty of care; the trends are going in the wrong direction in our opinion.”
ILPA’s model contract has “a pretty strong fiduciary duty provision in there and it actually includes a standard of care,” Hayes added.
For more on the terms in ILPA’s model contract, see the full story.