Senior LIFE kicks off PE-focused process, Align Capital invests in accountancy WilliamsMarston, LPs fear ‘erosion’ of fiduciary duties in fund contracts

Align Capital backs accounting and management consultancy WilliamsMarston and Senior LIFE courts private equity bidders.

Morning!

Emerging: Align Capital, launched by former executives of Riverside Co., made a growth investment in accounting and management consultancy WilliamsMarston. The investment will help WilliamsMarston expand into new geographies and expand its product offerings. Read the news here on PE Hub.

Align Capital closed its second fund earlier this year, just before the pandemic locked down most markets and slowed fundraising. Align closed Fund II on $450 million after little more than three months in the market, Buyouts previously reported.

Align launched in 2016 by Managing Partners Steve Dyke, Chris Jones and Rob Langley. Dyke and Jones were partners and Langley was a principal with Riverside prior to Align. The firm focuses on investing in North America B2B business services, specialty manufacturing and value-added distribution.

Fiduciary Duty: Here’s something causing a bit of controversy in the industry. Some LPs feel GPs are limiting or restricting their fiduciary duty to the fund in the way they write fund contracts.

That’s according to a recent survey from Institutional Limited Partners Association. As ILPA states it, fiduciary duties are being “eroded across the industry,” a summary of the survey said. ILPA found that 71 percent of LPs have seen fiduciary duties contractually modified or eliminated over the past year in at least 50 percent of the funds they backed, the survey said.

“Reduced fiduciary duties not only harm governance but also the quality of alignment between GPs and LPs,” the summary said.

“I’ve also noticed a degradation in the language in legal documents surrounding a GP’s level of fiduciary responsibility,” a fund-of-funds LP said in a separate interview. “I’m not sure we’ve seen a fund document that fully eliminates a GP’s fiduciary responsibility, but I wouldn’t be surprised if they’re out there.”

Not everyone agrees that fiduciary duties are being eroded. Instead, the enhanced disclosures in fund contracts of exactly what GPs are going to do and how they’re going to run their fund leads to the perception of a loosening of fiduciary duties.

“The provisions of fiduciary duty have not changed, but there’s been more discussion, which leads to LP-friendly clarifications,” said Jonathan Adler, partner at Debevoise & Plimpton.

“For LPs, there is a burden to review those disclosures and understand what it is a sponsor is permitted to do,” said Justin Storms, also a partner at Debevoise. “The LP community has perceived some of that disclosure as itself eroding the fiduciary duties under federal law.”

Read the story here on Buyouts.

Top Scoops
Senior LIFE kicked off a sales process targeting private equity bidders, Sarah Pringle writes on PE Hub. The company provides and manages prescription medications and offers coordinated health and support services to seniors.

The Senior LIFE process follows Apax Partners’ investment in InnovAge, one of the largest PACE organizations in the country, PE Hub previously wrote. Read more here on PE Hub.

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