The GP-LP relationship is where fund economics, governance, and risk allocation are finalized. A poorly drafted Limited Partnership Agreement (LPA) or side letter can cost a fund manager millions in misaligned carry or trigger LP exits at the worst possible moment. Vircon Legal advises general partners, limited partners, and fund administrators on the full spectrum of GP-LP documentation.
Our GP-LP practice covers:
- Limited Partnership Agreements (LPA) and equivalent governance documents for Turkish and offshore funds
- Side letter negotiation — MFN clauses, custom carry treatment, excused investments, key-person provisions
- Management fee structures: committed vs. invested capital basis, step-down mechanics, offsets
- Carry waterfall: deal-by-deal vs. whole-fund, hurdle rate, catch-up, clawback design
- Key-person events, no-fault divorce, GP removal mechanics
- LP advisory committee (LPAC) authority and conflict resolution procedures
- Co-investment rights and parallel vehicle structuring
- Default provisions, transfer restrictions, and secondary sale mechanics
We represent both sides of the table. For GPs, we draft balanced LPAs that hold up to institutional LP scrutiny while preserving sponsor economics. For LPs — family offices, sovereign wealth, institutional allocators — we conduct side letter negotiations and review existing fund documentation for hidden risks.
This work integrates closely with our fund formation, investment management, and M&A practices. Our VC Due Diligence Checklist outlines what LPs typically demand during fund commit, and our glossary covers core fund terminology like side letter, carry, hurdle, and MFN clauses.
How we help
The GP-LP relationship is where fund economics, governance and risk allocation are finally settled. We advise general partners, limited partners and managers across the full range of GP-LP documentation — and we sit on both sides of the table.
- Limited Partnership Agreements (LPAs) and equivalent governance documents
- Side-letter negotiation: MFN, bespoke carry, excused investment, key-person provisions
- Management-fee structures, carry waterfalls, hurdle, catch-up and clawback design
- Key-person events, no-fault divorce and GP-removal mechanics
- LPAC authority, co-investment rights and parallel-vehicle structuring
Related practice areas
This connects with our Fund Formation, Investment Management and M&A practices.
Founder Academy resources
Free, practical checklists for this area: VC Due Diligence Checklist.
Frequently Asked Questions
What are the key economic terms in an LPA?
Management fee (commonly around two percent on commitments during the investment period), carried interest (twenty percent is the reference point), preferred return or hurdle, and the distribution waterfall — European whole-fund versus deal-by-deal with clawback. Everything else in the LPA exists to protect these mechanics.
What protections do LPs typically negotiate?
Key-person provisions suspending the investment period, LPAC consent rights over conflicts, fee offsets for transaction income, no-fault removal or divorce rights at supermajority thresholds, co-investment allocation, and reporting standards. Institutional LPs increasingly bring their own side-letter stack.
How is carried interest taxed for Turkish managers?
Türkiye has no special carry regime, so the outcome follows the structure: founder units in a GSYF, profit distributions from a foreign GP entity, or employment-flavoured arrangements are each taxed differently. Modelling the carry waterfall through the actual entities before launch avoids unpleasant surprises at exit.