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Key Considerations and Tactics in Negotiating Side Letters for Private Funds  

Author:  Kelli L. Moll.; Omoz Osayimwese.

Source: Volume 53, Number 21, December 1 2020 , pp.259-264(6)

Review of Securities & Commodities Regulation

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Prospective investors frequently negotiate for side letters to vary the terms of their investment in a private fund from the terms set forth in the fund’s governing documents. The authors discuss the subjects frequently raised in such negotiations, the differences between PE Funds (closed-end) and Hedge Funds (open-end), the authority to enter into side letters, and MFN provisions. They then cover a number of issues pertaining specifically to PE funds and to Hedge Funds. They close with a note on compliance.

Keywords: Liquidity; In-Kind Distribution; Most Favored Nations Provisions; “Form” Side Letters; Side Letter vs. the Limited Partnership Agreement

Affiliations:  1: Akin Gump Strauss Hauer & Feld LLP; 2: Dechert LLP.

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