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What is the Parallel Fund structure mentioned in the Cornerstone LPA? When does the need arise for setting it up?

Top answer:

A manager may decide to set up a “Parallel Fund” in order to accommodate the needs of certain limited partners that have tax, regulatory or other issues in investing in the primary fund.  For example, a non U.S. limited partner may want...

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What's the most common way to handle defaulting LPs?

Looking at the Cornerstone LPA for example, I find there's multiple avenues a GP could choose to deal with a defaulting LP. What's, based on industry experience, the rationale for choosing one over the other, and which ones are the most common? - Removing the LP from the partnership by either considering their interest forfeited or selling it at a discount - Using distributions to cover capital calls - Pursuing legal action And when does it make sense for the GP to waive the interest? I imagine many of these decisions are down to the individual relationship with the LP, so I'd love to know the common/best practice here.

Top answer:

Usually, the LP will work to find a buyer for the defaulted position. That is the most common way to manage this. 

 -  Mike Suprovici
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