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Wednesday: What you won’t like about ILPA’s guidelines

We are all about CFOs’ interaction with investors today, in particular some of the contentious bits of the investor group’s influential guidelines.

So the latest version of the Institutional Limited Partners Association’s principles is out and there are a couple of parts – as noted by managing director and industry affairs chief Jennifer Choi – that may not be welcomed by GPs with open arms.

The first point relates to clawbacks, which according to the new guidelines should be calculated gross of taxes paid: a switch from the previous ILPA guidelines. “Because it hits people in their wallets, so to speak, we anticipate there will be views about that recommendation,” Choi said.

The second relates to subscription credit lines and preferred return. The guidelines recommend that calculation of the pref should be made on the basis “of the partnership’s cumulative investment history starting at the point an investor’s capital is put at risk via the partnership’s initial investment.” In other words, at the time of investment, rather than drawdown.

We want to hear from CFOs on both the of the above; do you think your investors will push on these points? Have they done so already? Email me.

Further reading: Nine takeaways from ILPA Principles 3.0.

The full guidelines can be found on ILPA’s website.

In other news, a couple of compliance chiefs are on the move. HarbourVest has a new CCO amid a wider expansion of its compliance and legal teams and Genstar have brought in former SEC attorney Carolyn Greenwalt.

This email was prepared by Toby Mitchenall.