medium · Private Equity pe-core
A $500M buyout fund has a 'Key Person' provision in its LPA. During Year 3, two of the three named key persons leave to start their own firm.
What is the most common consequence for the fund according to standard institutional terms?
- All remaining committed capital is automatically cancelled.
- The GP must return all management fees collected to date.
- The investment period is automatically suspended.
- The fund must immediately liquidate all its portfolio companies.
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