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Side letter

A bilateral agreement giving a specific investor terms differing from the main fund documents, such as fee discounts, reporting rights or co-investment access.

Side letter — A bilateral agreement giving a specific investor terms differing from the main fund documents, such as fee discounts, reporting rights or co-investment access.

Side letters proliferate in institutional fundraises and can create real administrative complexity — a manager with dozens of side letters across a large LP base needs a system to track which terms apply to which investor and ensure MFN rights are honoured consistently.

Frequently asked questions

Are side letter terms confidential?

Often yes, though MFN rights can require disclosure of certain terms to investors who hold them, and some information may be discoverable by other LPs through advisory committee participation.

Can any investor request a side letter?

Any investor can ask, but managers aren't obligated to grant one, and terms are typically reserved for larger or strategically important commitments.

Nothing on this page is legal, tax, or investment advice. SeRuM is not a registered broker-dealer, not a placement agent, and not an investment adviser.

MFNMost-favoured-nation: a clause letting an investor elect into more favourable terms grante LPALimited partnership agreement: the constitutional document governing a fund's economics, g Anchor investorAn investor committing early and at size, usually for preferential terms such as a fee dis

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