LPs rethink the key person clause

Limited partners reconsidering the key person clause signals a shift in how middle-market credit investors manage manager risk and protect their capital. As LPs reassess this covenant, it could lead to more flexible or stringent terms that directly impact fund governance and liquidity. For credit professionals, understanding evolving LP demands around key person provisions is critical for structuring deals, negotiating terms, and anticipating changes in fund dynamics that influence risk exposure and portfolio stability.