ILPA Principles
What They Are
The ILPA Principles are a set of governance best-practice recommendations published by the Institutional Limited Partners Association (ILPA). They are distinct from the ILPA Templates Hub (which focuses on reporting and notice formats): the Principles address the structural, governance, and conduct dimensions of the LP/GP relationship.
The Principles are not legally binding, but they are widely referenced by institutional LPs when evaluating GPs and negotiating LPAs. GPs that substantially deviate from ILPA Principles are expected to explain why.
The Principles have been updated over time. The current iteration focuses on three pillars:
- Alignment of interest — fee structures, co-investment allocation, key-person provisions, and GP commitment should align GP incentives with LP interests
- Governance — investor protections, LPAC rights, removal provisions, fund term and extension processes, and side-letter transparency
- Transparency — fee and expense disclosure, carried interest calculations, reporting frequency and detail, and access to information
Note: The full Principles document is publicly available from ILPA. This source note is based on publicly available summary descriptions; specific recommendations and their current version should be verified at the source URL above.
Why It Matters
LP/GP governance: The ILPA Principles provide the governance framework backdrop for what LPs expect from GPs on fund terms, LPAC rights, removal provisions, and conflict management — all discussed in limited partnerships and LP roles.
Fee and expense transparency: The Principles include specific guidance on how management fees, fund expenses, offsets, and carried interest should be disclosed to LPs. This is directly relevant to fee calculations and the fee disclosure obligations described in investor reporting.
Co-investments: ILPA Principles address co-investment allocation — the expectation that GPs offer co-investment opportunities on equitable terms and disclose any conflicts in the allocation process. This is the governance backdrop to the adverse selection discussion in co-investments.
Secondaries: GP-led secondary processes and continuation funds raise governance questions the ILPA Principles directly address — particularly around conflicts of interest when a GP is on both sides of a transaction. See secondaries.
Alignment of interest: The Principles’ alignment pillar underpins why key-person provisions, GP commitment levels, and hurdle rates exist — connecting to the GP/LP incentive structure described in LP roles.
Relevant Local Files
Source Verification Note
This source note is based on ILPA’s publicly available summary descriptions of the Principles. The full current version of the ILPA Principles should be consulted at the source URL above. ILPA has released multiple versions of the Principles over time; the current version and any associated guidance documents should be verified before relying on specific recommendations.