According to the Institutional Limited Partners Association (ILPA), one of the most serious misalignments between GPs and LPs involves runaway PE fund formation expenses. With legal fees routinely exceeding $1,500 per hour, ILPA asserts that GPs of large funds with well-established track records are not transparent with their LPs about legal budgets. In general, GPs lack incentives to ensure efficiency as to expenses that fall largely or entirely on LPs. To counter the growing misalignment, ILPA has released guidance (Guidance) that makes a case for capping fund formation organizational expenses; adopting a cost-sharing framework for any excess amounts; and improving discipline and transparency around legal fees incurred in fund formation. Although many LPs would welcome the greater probity and efficiency around expenses, legal experts interviewed by the Private Equity Law Report assert that the Guidance does not capture the nuances of, or the real drivers behind, rising PE organizational expenses. This article contextualizes the industry dynamics prompting ILPA’s efforts; summarizes the operative suggestions in the Guidance; highlights certain drivers and factors behind rising expenses that the Guidance overlooks (e.g., investor-driven side letter negotiations); considers the necessity of the proposal; and assesses the likelihood of its adoption by the industry. See “ILPA Study Gauges Evolving LP Sentiments Toward PE Allocations and LPA Negotiations” (May 28, 2026).