Emboldened LPs: The Latest LPA Request
It seems private equity investors have finally listened to our endless harping--they're taking a stand against general partner impropriety. Today, two separate sets of limited partners (LPs) took action against their GPs: In Munich, buyout fund Nordwind Capital's investors blocked its deal for a fertility clinic roll-up play, claiming the deal is off-strategy. The firm decided to cancel the deal rather than force the resistant LPs into default (note: all of this happens back in February, but it only came out today). And, in the U.S., investors in two Citigroup infrastructure funds have voted to ban them from making future investments, citing a key man provision and several failed deals. These actions, while headline-grabbing, are just a piece of some of the behind-the-scenes LP uprisings. Cash-strapped or not, private equity investors are actually using this tough fundraising time to negotiate for better terms in their fund documents (LPAs).
