Case 20General partner due diligence in Nigeria
Legal due diligence on a General Partner for a development finance institution.
Before a development finance institution commits capital to a fund, it must be satisfied with the manager behind it. We conducted the legal due diligence on the General Partner.
- Client
- Development finance institution (confidential)
- Sector
- Private equity and venture capital funds
- Practice
- Corporate & Commercial
- Jurisdiction
- Nigeria
The brief
A development finance institution was considering an anchor commitment to a fund managed by a Nigerian General Partner. Its investment decision depended on confidence in the manager’s legal standing, governance and regulatory position, and on the absence of risks that could later affect the fund or the institution’s reputation.
We were instructed to carry out legal due diligence on the General Partner and to report on any matters that should shape the commitment or the fund documents.
Our advice
- 01
Corporate and ownership review
Verifying the General Partner’s incorporation, constitutional documents, ownership and control, including ultimate beneficial owners.
- 02
Regulatory status
Confirming the manager’s registration with the Securities and Exchange Commission and its compliance with fund-management and anti-money laundering requirements.
- 03
Governance and key persons
Reviewing board and investment committee structures, conflicts policies and key-person arrangements.
- 04
Litigation and integrity checks
Searching for litigation, regulatory sanctions and adverse matters affecting the General Partner and its principals.
- 05
Reporting
Delivering a due diligence report that set out our findings, rated each risk and recommended protections for the side letter and fund documents.
Outcome
The institution received a clear legal picture of the General Partner and the protections it should require, giving its investment committee a sound basis for its decision.