Mintz Investment Funds Chair, Kari Harris spoke to Buyouts Insider on the resistance from limited partners (LPs) to 'pre-clearance' of general partner (GP) led deals. Kari commented, "There has to be a basis for LPs to trust that the GP is acting in their best interests. The advisory board is there to ensure that someone is watching and keeping GPs accountable in light of all the discretion they have on a blind-pool basis to find deals." She continued, "Pre-clearance comes through an expansion of the language to indicate that in some cases, the GP doesn’t have to follow that process. As long as the price has been validated, and as long as the LPs are offered practical options and the terms are no less favorable than would be obtainable from a third party buyer, “then we don’t even need to go to the LPAC; you will be deemed to have consented in advance."

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Buyouts Insider