Funds are generally structured as closed-ended limited partnerships which require Limited Partners to commit capital for the finite term of the partnership, typically 10 years. While the Limited Partners are aware of the general strategy of the fund, they do not have a say in the choice of target companies that the fund will invest in.
General Partner:
is responsible for all aspects related to the managing the fund and must act solely in the interest of the fund’s investors
issues capital calls to LPs and makes all investment and divestment decisions for the fund in line with the mandate set out in its LPA
may delegate some of the management functions to the investment manager but remains fully and personally liable for all debts and liabilities of the fund
Limited Partners:
contribute capital to the fund
cannot be involved in the day-to-day operation or management of the fund or its portfolio companies
legally commit to provide capital and receive distributions of capital upon successful exit of the fund’s investment
their liability is limited to the capital committed to the fund
Investment Manager:
conducts day-to-day activities of the fund
evaluates potential investment opportunities, provides advisory services to the fund’s portfolio companies and manages the fund’s audit and reporting processes
is paid a management fee by the fund for providing these services (typically 2% of committed capital)
Portfolio Company:
The will invest will invest in a number of companies over its lifetime that will form its investment portfolio (target companies)
What Vauban can do:
Help you choose the right domicile and fund structure
Incorporate Register legal entities necessary for fund formation
Provide tailor-made legal documentation