A senior hire last year by global alternatives giant Kohlberg
Kravis Roberts & Co (KKR) from CLSA Capital
Partners (CLSA)1 brought the spotlight
on a significant clause in investments funds documentation –
key person event. The purpose of such key person event provision is
to ensure that the members of the fund management
(GP) team critical to the fund's functioning
devote substantial business time and attention to the fund. Failure
to devote the requisite time can result in serious consequences for
the GPs.
In May 2018, KKR appointed John Pattar, CEO of CLSA's
largest real estate fund, Fudo Capital III as Member and Head of
its real estate business.2 Being a key person at Fudo
Capital III, his exit triggered consequences for the live funds in
the CLSA platform. In the instant case, the GP team pre-empted the
triggering of key person provisions due to Pattar's exit and
cancelled the remainder of the investment period3,
effectively limiting its ability to call for
