What is the best procedure for offering deal flow directly to LPs? Not co-investments -- but good deals that don’t fit the fund thesis.

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Community Member

Feb 06, 2024

Decile Base’s answer goes into... set up an SPV, watch out for conflicts, be sure to offer to all LPs, use your LPAC.

All good. But I’d like to know how to specifically avoid conflicts of interest while introducing LPs to a deal we passed on (no SPV, no LPAC yet). This will be a regular occurrence.

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1 answer

Haw Kuo

Accepted Answer

Feb 07, 2024

Generally speaking, avoiding conflicts of interest when introducing LPs to a deal a Fund has passed on (and where such deal is not within the Fund's thesis), would be accomplished by following these best practices:

Set up the LPAC (this is a relatively easy process);
Ask LPAC to evaluate and confirm that the deal is not within the Fund's thesis and that deal is okay to send to LPs;
Send deal to all LPs simultaneously without making an investment recommendation;
Remind LPs to do their own due diligence;
Ensure the Fund does not participate directly or indirectly after passing on the deal.

Clearly documenting all of these above steps is key.

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What is the best procedure for offering deal flow directly to LPs? Not co-investments -- but good deals that don’t fit the fund thesis.

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