Terence Rozier-Byrd Quoted by Private Equity Law Report on Individual Contributions to GP Commitments
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Private Equity Law Report has quoted Akin Gump investment management partner Terence Rozier-Byrd in its article “GP Commitments: Employee Participation Introduces Complexity, LP Disclosure Issues and Structural Considerations.”
In the closing installment of this two-part series (click here to read part one), the publication addresses, among other key issues, which individuals contribute to the GP commitment, and the potential issues that arise when individual participants include non-principals.
Among the topics covered, Rozier-Byrd noted that, while employee contributions to the GP commitment are quite common, the investment amount is often capped by the employer or limited around particular parameters.
The publication added that, under the Investment Company Act of 1940, employees must meet certain qualifications under the fund’s investor suitability requirements or be a “knowledgeable employee.” To that point, Rozier-Byrd said, “Sometimes GPs like to provide fairly junior members of investment teams with the opportunity to invest in funds. The knowledgeable employee definition enables a broader pool of employees to be deemed ‘qualified purchasers’ so that they are eligible to invest.”
To read the full article, click here.
