Identify Lpa Issues

---
name: identify-lpa-issues
task_id: funds-asset-management/identify-lpa-issues
description: Review a private equity fund LPA from an LP investor's perspective and produce an issues memo with severity ratings and negotiation recommendations for provisions that deviate from market standard or the LP's investment guidelines.
activates_for: [planner, solver, checker]
---

# Skill: LP-Perspective LPA Issues Review

## 1. Subject-matter triage (only if applicable)

- Use this skill for a fund LPA review where the client is an LP investor and the objective is to identify deviations from market or from the LP’s guidelines and prior side letter.
- Treat the review as a systematic provision-by-provision issue spot, not a selective scan for headline terms.
- If multiple provisions are in scope, enumerate them before analysis and track each separately through the memo.
- If the source set includes a prior side letter or investor guidelines, test the draft LPA against both; do not assume they are redundant.

## 2. Failure modes the skill is correcting

- Reviewer identifies only a few high-profile issues and misses less obvious but still material deviations.
- Reviewer treats a multi-part protection as a single issue and fails to surface each independent weakness.
- Reviewer fails to assess employee benefit plan investor qualification implications and does not explain the consequences of qualification failure.
- Reviewer omits severity ratings, leaving the LP unable to triage negotiation points.
- Reviewer gives criticism without a concrete negotiation recommendation or timing anchor.
- Reviewer states conclusions without tying them to the governing fund-document or regulatory framework.
- Reviewer ignores interactions among provisions that change the practical effect of the term being reviewed.

## 3. Legal frameworks / domain conventions that apply

- Clawback should be reviewed for each distinct weakness, including tax gross-up assumptions, absence of personal support, timing of testing, and cure mechanics. Analyze each weakness separately because they can compound.
- Without-cause removal should be assessed for both voting threshold and economics on removal; a fee payable on removal is LP-unfavorable and should be flagged independently of the threshold.
- For-cause removal turns on the breadth of the cause definition; narrower-than-market standards entrench the GP.
- Management fee offsets should be compared to ILPA Principles; a sub-full offset is below benchmark if portfolio company fees are not fully credited.
- Employee benefit plan investor qualification should be analyzed under the applicable plan-asset regime, including whether the fund is required to obtain and exercise portfolio-company management rights on an ongoing basis; loss of qualification can trigger ERISA plan asset treatment and related fiduciary and prohibited-transaction exposure.
- Recycling should be compared to market practice and evaluated for economic and fee-base expansion effects.
- Placement agent fees should generally be borne by the GP rather than charged to fund organizational expenses.
- LPAC governance should be checked for adviser access on conflicts, quorum, and member removal/replacement mechanics.
- No-fault termination rights are a market LP protection and should be tested against any absence or dilution.
- Co-investment rights stated only at GP discretion should be reviewed for lack of allocation standards and notice mechanics.
- Key person provisions should specify a measurable time-commitment threshold or equivalent objective standard.
- Exculpation should not extend beyond market-standard protection for fraud, willful misconduct, and gross negligence.

## 4. Analytical scaffolds

- Start with a checklist covering each major fund term, then read the draft LPA, investor guidelines, and prior side letter against that checklist.
- For each issue, identify: the exact provision, the deviation from market or the LP’s position, the direction of the deviation, and whether any other clause changes the practical impact.
- Close each issue with three elements:
  - scale it against a source-document figure, threshold, term, or operative condition where available;
  - cross-reference the interacting clause, schedule, side letter term, or guideline that affects it;
  - state the downstream consequence for the LP.
- Where a term can be tested against more than one standard or time horizon, treat each relevant standard or horizon separately rather than collapsing them into one conclusion.
- Use governing authority where helpful: ILPA Principles for fees and offsets; the applicable plan-asset regime and ERISA for investor qualification questions; and the LPA text, side letter, and guidelines for contract-specific deviations.
- Keep recommendations actionable: identify the preferred revision and the fallback ask if the first position is unlikely to land.

## 5. Vertical / structural / temporal relationships (only if applicable)

- If the LPA has a hierarchy clause, assess whether the side letter or guidelines modify the draft LPA and whether the memo should treat the side letter as controlling for the specific investor.
- If a term depends on fund life, investment period, testing date, cure period, or post-termination mechanics, analyze when the protection bites and whether delay changes the LP’s recovery or influence.
- If a provision interacts with a fee base, commitment amount, recycled capital, or organizational expense bucket, explain how the interaction changes economics rather than reading the clause in isolation.
- If investor qualification depends on ongoing actions, check both formation-time and continuing obligations; a one-time covenant may be insufficient if the rule requires periodic exercise or monitoring.

## 6. Output structure conventions

- Produce a single issues memo, not a redline and not a legal opinion.
- Start with a short severity key using an ordinal scale such as Critical, High, Medium, and Low, defined once and used consistently.
- Organize the memo by issue, with each entry containing:
  - issue title;
  - affected provision;
  - severity;
  - why it matters for the LP;
  - market or guideline comparison;
  - interacting provisions or documents;
  - recommended negotiation position.
- Include both the legal/market benchmark and the practical LP consequence in each issue entry.
- End with a Recommended Actions section that states the next negotiating steps in imperative form, assigns them to the relevant role, and ties them to the current deal phase or another concrete timing anchor.
- Use industry-conventional headings and numbering; do not mirror any hidden rubric label or check-list format.