Fund Structure
Fund Term and Extensions
The contractual life of the fund (typically 10 years) plus a defined number of extension years, usually requiring LPAC or LP consent.
A standard structure is a 10-year term plus two one-year extensions at GP discretion, with any further extensions requiring LPAC consent. Extensions have become routine in the slower exit environment of recent vintages.
What LPs should watch: whether management fees continue during extensions (best practice is they step down or stop), and whether extensions are being used to defer recognition of weak positions rather than to maximize value.