Limited partner (LP) advisory committees (LPACs) were developed to, among other things, serve as a check on procedural miscues at the fund level and review conflicts of interest presented by general partners (GPs). As the PE industry has matured and become more complex, however, LPACs themselves are becoming subject to procedural scrutiny, structural changes and conflict-of-interest concerns that are consuming more time and attention of LPs and GPs. To better understand these changes, the Private Equity Law Report interviewed Paul Weiss partner Amran Hussein about the recent evolution of LPACs and the types of issues they are facing. This second article in a two-part series explains how increasingly complex PE strategies are presenting unique issues for LPACs to approve, as well as how the information divide can be bridged between LPAC members and non-member LPs. The first article
provided an overview of various procedural changes that have been adopted for managing LPAC efforts, including mechanisms favored by GPs to keep LPAC members accountable. For more on LPACs, see “Current Scope of PE‑Specific Side Letter Provisions: Co‑Investment Rights, LP Advisory Committee Seats and Parallel Funds/AIVs (Part Two of Three)
” (Mar. 26, 2019); and “Proper Use of Advisory Committees by Private Fund Managers May Mitigate Conflicts of Interest
” (Dec. 17, 2015).