What is Key Person Clause?
A key person clause in an LPA suspends the fund's investment period if specified key investment professionals leave or are no longer dedicating sufficient time to the fund, protecting LPs from continuity risk.
Key person provisions identify the one, two, or three investment professionals whose involvement is essential to the fund strategy. If they leave, are incapacitated, or reduce their commitment below a defined threshold, the fund enters a "key person event" — automatically suspending or limiting the investment period until LPs vote on how to proceed.
Key person clauses are one of the most negotiated LP protections. LPs want broad coverage; GPs want narrow definitions. The trigger is often "any one of two key persons" to balance protection with operational flexibility.
Also known as: key man clause, key person provision