How to Track Excuse Rights as an LP After You Close

How to track excuse rights as an LP is the ledger you keep after you already own the fund: which deals you skipped, and what unfunded is still due on the rest. It is not a side-letter inventory. Raziel's side letter tracking page is the letter itself (counterparty, date, MFN, right labels, sunset, evidence, last reviewed). This page is six fields on each excused call: source (LPA versus side letter), excused investment types, notice you sent, call you skipped, remaining unfunded still due on other deals, last evidence.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the signed LPA, any side letter, the drawdown notice, and the excuse notice you sent. Do not invent an excuse list.

What this ledger is (and is not)

ILPA Principles 3.0 (June 2019) tells the GP to accommodate an LP's exclusions policy, which may proscribe the use of its capital in certain sectors and/or jurisdictions, while taking into account any increased concentration effects on remaining LPs. The GP's investment limitation policy should apply to each LP on an individual basis. Those are recommendations, not a sector menu. The ILPA Model LPA (whole of fund, July 2020) Section 6.7 is template language for Excused Limited Partners. It excuses a capital contribution, or an amount funded from retained Distributable Proceeds, when a Material Adverse Effect test is met. It does not print a list of industries. Copy the clause you signed.

Six columns on one fund row

Open one row per fund after close. Do not collapse two vehicles that share a GP brand. Copy each field from the LPA or side letter and from the notice you sent. If a field is missing, store that it was missing. Principles 3.0 wants at least 10 business days for LPs to respond to capital call requests. The Model LPA Drawdown Notice (Section 6.2.1) is at least 10 Business Days prior to the Due Date.

• Source (LPA versus side letter). Where the right lives. Model LPA Section 6.7 sits in the partnership agreement. Principles 3.0: LPs should limit side letters to essential statutory or other institution-specific requirements, and GPs should move common side-letter terms into the LPA. Model LPA Section 20.6.2 carves excuse rights out of most-favored-nation. If the right is only in the letter, store side letter. If both, store both and keep the letter on the side-letter row.

• Excused investment types. The trigger printed in your documents. Model LPA 6.7.1.1: the LP's reasonable determination that making all or a portion of the investment is reasonably likely to have a Material Adverse Effect on that LP. That definition includes a written LP policy the GP agreed in writing on or prior to admission, provided it remains in effect. A Model LPA footnote says such a policy may include environmental, social, and governance factors. Principles 3.0 names sectors and/or jurisdictions as the kind of thing an exclusions policy may cover. Copy the agreed policy or the side-letter categories. Do not paste a market list.

• Notice you sent. Date and file of the excuse you delivered. Model LPA 6.7.1.1: a notification plus an executive-officer certificate within five Business Days after the Drawdown Notice. If the GP invokes 6.7.1.2, it must advise you in writing within five Business Days and deliver a counsel opinion reasonably satisfactory to you. Those five days are Model LPA language. Copy your clock.

• Call you skipped. The deal, amount, and due date on the notice you did not fund. Model LPA 6.2.4.1 leaves Excused Limited Partners out of the pro rata share of a new Portfolio Investment. If the purpose of a drawdown changes, or the GP funds a deal from retained proceeds, Sections 6.3.2 and 6.5 require a revised notice at least 10 Business Days prior so you can exercise the excuse. Date the skipped call. Do not invent a dollar example.

• Remaining unfunded still due on other deals. Remaining Commitment after the excuse. Model LPA 6.7.3.2: if not drawn, Remaining Commitment is not reduced. 6.7.3.1: if already drawn, repaid within 10 Business Days and added back. 6.7.3.4: you remain obligated on later Portfolio Investments, Fund Expenses, and Organizational Expenses, but not Follow-ons or expenses of the excused investment. 6.7.4: you are not a Defaulting Partner on that contribution.

• Last evidence. The document date on the LPA clause, side letter, drawdown notice, excuse notice, GP advice, counsel opinion, or repayment. If you have no file, store that it was missing.

Source is the clause, not a market menu

Do not invent how excuse works. Your source cell is LPA, side letter, or both. The Model LPA test is Material Adverse Effect, not a printed industry list. Section 6.7.1.2 also lets the GP excuse you if your participation would prevent consummation, increase the risk or difficulty, impose a material filing, tax, or regulatory burden, or cause a material extraordinary expense. Copy yours. Principles 3.0 lists GP investment that violates the stated exclusions policy as an LPAC conflict item. That is not your excused-types cell unless your documents say so.

Remaining unfunded stays due on the next call

Skipping one call does not shrink the commitment for the next one. Model LPA 6.7.3.3: you are not allocated distributions, income, gain, loss, or giveback liability on the investment you skipped. The GP may still make the deal without you and overcall the other limited partners, capped at the lesser of each other LP's Remaining Commitment and a bracketed 50 percent of what that LP was originally required to make. The 50 percent is a template fill-in. Your remaining unfunded is still due on other deals under 6.7.3.4.

When the ledger holds

The row holds if source is LPA or side letter as printed, excused investment types are copied from the agreed policy or clause, notice you sent is dated or stored as missing, call you skipped is the notice you did not fund, remaining unfunded still due on other deals is Remaining Commitment after the add-back, and last evidence is a document date or stored as missing. It fails when you paste a sector menu the documents do not print, treat an excuse as a default or a commitment write-off, or collapse the side-letter inventory into this row. Raziel's alternative-asset dashboard is the investment record those rows can sit on: cash dates, documents, IRR and MOIC, AI ingest of the pack, capital calls, wallets and bank linking. Raziel does not give investment advice. Copy the six columns. Leave the clause to the LPA and the letter.