ILPA Model Limited Partnership Agreement: Fund Finance Considerations

To assist limited partners (“LPs”) and general partners (“GPs”) establishing limited partnership agreements (“LPAs”) for private equity funds (“Funds”), the Institutional Limited Partners Association (“ILPA”) recently published a Model Limited Partnership Agreement (the “MLPA”). Certain provisions currently included in the MLPA, however, could pose challenges for GPs seeking to obtain Fund-level leverage or to include LPs in the borrowing base for a subscription-backed credit facility. This Fund Finance Market Update discusses how strict adherence to certain MLPA provisions may conflict with lender expectations in such Fund-level financing arrangements.