Marketing documents can be key to the success of any private equity fund, but legal advisers need keep a close eye out that clients don’t make any errors that could derail a fundraise or worse.
The purpose of the marketing documents, to entice potential investors to commit capital to a particular fund, may seem like an invitation for fund managers to talk up their past and rave about the returns they’ll be able to generate. However, there are rules and regulations to abide by, and even something as simple as a misrepresentation of a fund manager’s track record could land your client’s fund in hot water with investors and regulators alike.
Here, Law360 explores five mistakes in private equity fund marketing documents that legal counsel can help clients avoid.
Howard Berkower, a partner in McCarter & English LLP’s corporate practice, agreed fund managers need to be honest with themselves about their role in past deals.
“It’s important you were the person actually calling the shots in terms of decision making,” he said.