The subscription documents are the documents which provide the manager with background information on the investor. When an investor becomes a “partner” in the fund, the investor is executing the limited partnership agreement. It provides a description of the rights of the investors and the manager. The limited partnership agreement (also known as the “LPA”), is the actual governing legal document. The limited partnership agreement (or, if the fund is an LLC, the operating agreement).It provides the prospective investor with information on the structural and business aspects of the fund. ![]() The private placement memorandum (also known as the “PPM”), is the main offering document. The private placement memorandum (also sometimes called the offering memorandum).The three parts of the offering documents are: The offering documents will look very similar to a mutual fund prospectus. The offering documents are the necessary paperwork that the manager must give to prospective investors. ![]() ![]() Specifically the offering documents will most likely be drafted to conform to the requirements of Rule 506 of Regulation D under the Securities Act of 1933. The offering documents are designed to comply with the requirements of the federal securities laws as interests in the fund (whether the fund is a limited partnership or a limited liability company). The central reason that beginning hedge fund managers need a lawyer is that the lawyer will prepare the offering documents for the fund.
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