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The increased pressure on general partners in the context of a more challenging fundraising environment results in more and more general partners conceding more favorable conditions to the limited partners. Such conditions partly consist in financial rights, such as a waiver of part of the management fees or an increase of the hurdle rates. But it can also consist of non-financial rights, such as additional information and/or reporting obligations or the granting of opt-out rights.
An opt-out right is the right granted to an investor (or a group of investors) of significant importance to refuse to be financially exposed to one or several specific investment(s). Such market driven mechanism raises a series of issues from its accounting treatment to its legal nature....
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