The Limited Partnership Agreement — the LPA — is the constitution of the fund. Every economic outcome, every governance right, every exception to a rule someone forgot to anticipate, is written down here. Reading an LPA fluently is the most valuable single skill on the LP side of the table.
How an LPA is organised
A standard LPA has a recognisable structure: definitions; commitments and capital calls; investment policies and limitations; management and operations; fees and expenses; the waterfall; transfers; defaults; reports; the LPAC; key-man and removal; term and dissolution. Most LP analysts read in this order, and the negotiated provisions (key-man, removal, fee offsets, LPAC composition) get the heaviest attention.
What a sophisticated reader looks for is not just what each section says but what each section doesn't say. An LPA without a clear no-fault removal provision is a different fund from one with a 75% supermajority threshold — even if neither is ever invoked.
Investment period and key-man
The investment period (typically 5 years) is the window during which the GP can call capital for new investments. After it ends, the GP can only call for follow-ons, fees, and expenses on existing investments. Key-man clauses automatically suspend the investment period if a named partner dies, departs, or stops devoting time to the fund. Suspension can be lifted by LPAC vote; absent a lift, the fund essentially stops investing. The list of named key persons is one of the most-negotiated parts of any LPA.
Removal rights and no-fault divorce
LPs can remove the GP for cause (typically defined as fraud, gross negligence, or material LPA breach) by simple-majority vote. No-fault removal — termination without cause — typically requires a 75–80% supermajority and triggers carry-forfeiture or carry-haircut consequences for the removed GP. These rights are rarely invoked but profoundly shape GP behaviour.
The LPAC
The Limited Partner Advisory Committee is a small body (typically 5–9 members, drawn from the largest LPs) that votes on conflicts, valuations, and any matters the LPA explicitly delegates to it. The LPAC is not management — it cannot direct investments — but it is the LPs' voice on conflicts, fee disputes, and continuation-vehicle proposals (Chapter 33). LPAC composition and the precise list of LPAC consents are heavily negotiated.