LP Advisory Committee (LPAC)
An LP advisory committee (LPAC) is a group of LP representatives that advises the GP and provides oversight on conflicts and certain approvals.
Allocator relevance: A key governance mechanism—LPAC strength affects conflict handling, transparency, and LP protections in edge cases.
Expanded Definition
LPACs typically review conflicts of interest, valuation issues, extensions, key person events, related-party transactions, and other matters where GP discretion needs oversight. LPAC participation gives LPs earlier visibility into issues and a structured channel for influence, though LPACs do not run the fund.
LPAC effectiveness depends on the LPA, the GP’s culture, and how often the LPAC is convened.
How It Works in Practice
The GP calls LPAC meetings when approvals or consultations are required. Members review materials, ask questions, and vote or provide consent depending on the matter. Some LPACs are active and rigorous; others are largely procedural.
Decision Authority and Governance
LPAC authority is defined in the LPA. Governance quality depends on clarity about what requires LPAC approval versus disclosure only, plus how conflicts are documented and resolved.
Common Misconceptions
- LPAC controls the fund (it typically doesn’t).
- LPAC ensures conflicts never occur (it manages them).
- LPAC membership is purely symbolic.
Key Takeaways
- LPAC is the practical governance interface for LPs.
- Strength is determined by scope, transparency, and enforcement.
- LPAC is critical in stressed or conflicted situations.