Below is a summary of the typical legal documents for the formation of the fund:
Limited Partnership Agreement
The LPA sets out the general terms and conditions applicable to all the participants in the fund - it is the governing document of the limited partnership.
In brief, it sets out:
General information regarding the partnership
Laws and regulations that govern the agreement
Name, address, principals
Term of the partnership
Purpose of the partnership
Partners and capital
Capital calls and distributions
LP limited liability
Fees and carried interest
Management fees
Carried Interest
Rights and duties of the General Partner
Other terms such as the role of an advisory committee
Private Placement Memorandum
This is the document that is used to sell the fund to investors. It highlights:
o Investment policy and strategy
o Details of the risks associated with the fund’s investment
o Risk management policies
o Background of the team responsible for the management of the fund
While this is not necessary, many fund managers prefer to have it as the content is not as “heavy” as the limited partnership agreement, however, it is not a binding agreement.
Investment Management Agreement
This is the agreement between the fund and the investment manager which sets out the responsibilities and obligations of the Investment Manager. It also sets out the management fee rate and the payment arrangements. This document is necessary
Subscription agreement
By signing the subscription agreement, the Limited Partner adheres to the limited partnership. It also includes the amount of capital the Limited Partner will commit to the fund, as well as the bank account to which the distributions will be sent.
Side Letters
These are agreements with the Limited Partners which include variations from the fund’s Limited Partnership Agreement. They are generally used to offer discounts on fees and other favourable terms as long as it does not negatively impact other Limited Partners.
What can Vauban from Carta do
Vauban will provide all the legal documentation necessary for the fund
The smart document generation capabilities ensure that the documents are created quickly and efficiently without the investor having to manually fill in anything
As soon as an investor is onboarded, the subscription agreement and any other accompanying documents are generated automatically through the Dashboard
All docs are signed electronically on the dashboard, no need to print or mail/email anything