UK: English High Court Provides Guidance On Scope Of Documents Required To Be Provided To Private Equity Fund Investors

Last Updated: 18 July 2012
Article by Jonathan Shenkman and Marc Melia

A series of High Court judgments in London have provided a degree of clarity on the extent to which a limited partner in an English Limited Partnership is entitled to obtain information in relation to a private equity fund and its underlying investments.1 These judgments are likely to impact contractual discussions between fund managers and limited partners in the key area of investor reporting.

In giving judgment, Norris J considered the extent to which an investor is entitled to obtain such information as a matter of statute (under the Limited Partnerships Act 1907) and as a matter of contract (under the terms of a limited partnership agreement), noting the practical limits to the requests that a limited partner can make. Over the course of two judgments, the judge ultimately decided the case in favour of the general partner by applying a somewhat restrictive interpretation as to what constituted "partnership documentation" and by drawing a distinction between information physically in possession of the partnership (by being held by its general partner and/or manager) and other information which was solely held by underlying investment entities of the partnership.

The judgment is likely to have an effect on the manner by which investors will approach negotiations with general partners on reporting issues in new funds and also provides general partners with some degree of comfort, absent conflicting contractual provisions in their limited partnership agreement, over the means by which limited partners can secure detailed information on the fund's investments and wider activities.

Background to the Case

The case was brought against a US-based private equity real estate fund manager by a Spanish investor, which had taken certain limited partner positions in a European private equity real estate fund structured as an English Limited Partnership. The fund had a conventional management structure – management of the partnership was vested in the general partner which in turn delegated the performance of certain of its duties to an external manager pursuant to the terms of a management agreement. Under the partnership agreement, the manager was obliged to keep full and accurate books of the partnership to cover all receipts and expenditures, assets and liabilities and profits and losses of the partnership. It appears that the manager produced a conventional level of reporting for the investors in the fund by providing audited accounts of the partnership as well as (amongst other reports) market value and funding package reports for the underlying investment vehicles. The fund made eight investments in all, of which two were particularly in issue as the investors' capital for those two investments had been eroded by approximately half. These particular investments were not described in detail in the judgments, but it is apparent that the investments were made via an underlying layer of special purpose vehicles ("SPVs").

Prior to the losses being recognized on the deals, the investor wrote to the general partner seeking to obtain a better understanding of the investments and their underlying financial structures. Certain information was provided by the general partner, which was deemed insufficient by the investor who then requested further detail. The general partner ultimately refused to provide the further information on the basis that the documents requested went "well beyond what the limited partner was entitled to review"; the proper entitlement being to the partnership documents only. The matter came before Norris J in the High Court who was asked to determine what information a limited partner is entitled to obtain pursuant to its rights under s6(1) the Limited Partnerships Act 1907 "to inspect the books of the firm and examine into the state and prospects of the partnership business."

In reaching judgment the judge noted that, despite the investor's arguments, the general partner had in fact identified and collated a substantial body of documentation which it had determined were "partnership documents", and that therefore the onus had passed to the investor to demonstrate in what respects the available documentation was insufficient to enable it to make a determination as to "the state and prospects of the partnership business" within the meaning of the Act. There can be no doubt that the general partner's provision of an extensive set of documentation put the investor in a more difficult position in bringing its claim for further information.

The concept of "Partnership Documentation" in relation to the business of "Private Equity"

In giving judgment, the judge noted that the general partner of a partnership was obliged to maintain a record of the partnership's business and affairs sufficient to enable a partner with access to it to examine into the state and prospects of the partnership business but that the extent of this obligation varies from case to case depending upon the partnership business.

For the purposes of the business of "private equity funds", it is possible to derive some interesting guidelines from the judgment in relation to key private equity documentation and reporting.

Funding Documentation - the investor sought disclosure of all credit agreements, mezzanine facilities and indeed all correspondence with bank lenders. The judge disagreed that all such information was required to be provided save insofar as the documentation related to credit lines and facilities established in the name of the partnership for which the limited partners could be liable. Most importantly, funding documentation had also been sought by the investors from the investment-level SPVs, but here the judge found that such documentation only needed to be provided to the investor if it was the practice of the partnership to call for and review copies of the transactional or operational documentation of the SPVs. If the information stayed at the SPV level and (subject to the broader principles, sufficient information was still provided for accounts to be drawn up accurately at partnership level), then there was no right for the investor to obtain that information.

Constitutional Documents and Other Documentation of the SPVs - disclosure was sought in relation to the constitutional and participation agreements relating to the SPVs as well as draft documentation, any notes or records of meetings or conservations where any decision to invest in one of the particular investments was considered, as well as any formal or informal records of the investment strategies of the underlying SPVs. The investor requested the information so that it could determine (over the course of the life of the investment) how and upon the basis of what information, decisions were taken on underlying investments. The general partner argued that this information had already been provided in its broader reporting schedules. Despite being supportive towards the cause of the investor, the judge found that the general partner was only obliged to provide the constitutional documents in relation to the underlying SPVs and its general reporting package and that there was "no question of the general partner having any obligation to make up partnership books and records which do not at present exist in fact by using whatever shareholder rights the partnership may have to enforce against the underlying SPVs". The judge also did not see any basis upon which the investor could require the general partner to obtain drafts or notes or conversations between the underlying SPVs and third parties.

Advisory Committee Documentation - the investor also sought disclosure of all documentation in relation to the limited partners' advisory committee (including presentations made to the advisory committee, minutes of meetings and documents referred to in those meetings). The judge found that while the minutes and agenda of the meetings (including any documents annexed to such documents) were "partnership documents", the documents referred to in such meetings were not "partnership documents" and did not need to be disclosed. However, the judge also found that a reasonable request to supplement the formal record by the provision of readily available and obviously relevant information ought to be met by the general partner.

Underlying Hedging Documentation - due to the nature of the specific transactions in issue, the investor sought disclosure of the hedging documents relating to the partnership's indirect participation in the two investments (note that with the exception of one document, these were all entered into at SPV level only). Again the judge noted that the conventional reporting provided by the manager to the investors would have covered this information (and in particular the pricing of the various hedges) and that this was sufficient in itself.

Primary Transactional Documentation - this was an extensive request by the investor for a complete breakdown of all commitments, including details of when those commitments were made, all investments, amounts invested, all sale and purchase agreements together with a very complete schedule of all investments (including opening balances, additions, disposals, revaluations, gains and losses). The judge was unsympathetic to this request, comparing it to a limited partner in a retail business asking for a copy of all till receipts. The judge referred the limited partner to the audited accounts of the partnership which he had not been persuaded were insufficient to make the necessary determination.


One conclusion to be drawn from the judgment is that sound extensive reporting by a general partner will render it difficult for a limited partner to obtain further documentation from a limited partnership absent specific provision for such further information in the partnership documentation. Another important element of the decision is the extent to which certain documentation retained at the SPV level may be largely insulated from investor requests for disclosure (at least as a matter of statute). As partnership reporting becomes increasingly scrutinized, it will be interesting to see to what extent limited partners will look to negotiate fund limited partnership terms to provide for information flows not just from the partnership itself but also in relation to the underlying SPVs of the partnership. Should this occur, it is likely that this will be resisted by general partners on the basis that they are already spending significant resources on reporting for limited partners and that facilitating the types of detailed investment-level disclosures sought by the investor in the Inversiones case would be excessive.

General partners may take away from the case the importance of confidentiality and that requests for disclosure of certain "partnership documents" could be trumped or minimised through an effective confidentiality clause in their relevant limited partnership agreement or management agreement.

While the case concerned an interpretation of English partnership law, it is likely to have implications in other common law jurisdictions and we would expect its interpretation to be relevant to common law offshore fund jurisdictions such as the Cayman Islands and the Channel Islands.


1 Inversiones Frieira SL and another v Colyzeo Investors II LP and another. Judgments are available at: (July 2011 Judgement) (May 2012 Judgement)

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Seyfarth Shaw LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions