3) Having the
contractual authority to make acquisition decisions is enough even if it
doesn't have the authority to make disposition decisions
Sent: Wednesday, July 27,2011 2:48PM
To: Verne,B. Michael
Subject: Inquiry Regarding Associates
Wewould like to confirm the associate analysis with respect to the followingstructure commonly used by our private equity clients:
FundsA, B, X, and Yare their own UPEs. Funds A and B have the same general partner(GP) that is a limited partnership (LP) and that is its own UPE (the A/B GP).Funds X and Y have the same GP that is an LP and that is its own UPE (the X/YGP). Each of A/B GP and X/Y GP, in turn, has a GP that is an LLC andthat is its own UPE (A/B LLC and X/Y LLC, respectively). The investmentdecisions regarding Funds A and B are made by the investment committee of A/BLLC (A/B investment committee). The investment decisions regarding Funds X andYare made by the investment committee of X/Y LLC (X/Y investmentcommittee). Each of the investment committees is composed ofindividuals/natural persons. None of the individuals/natural persons hascontractual authority to manage investments --their authority comes from theorganizational documents of the respective LLC. There is significant overlap inthe two investment committees.
Asalways, many thanks for your guidance!