The Institutional Limited Partners Association has released a model limited partnership agreement for the private equity industry.

As a legal template, the model is available for free to the industry and establishes a new standard for aligning the interests of general and limited partners, according to a release from the association.

It addresses a need for GPs and LPs to reduce costs, complexity and the resources needed to negotiate terms for private equity fund deals, the release said.

“The industry has to date lacked freely accessible model documents that can serve as a baseline for reasonable legal terms and conditions associated with private equity funds,” said Steve Nelson, chief executive officer of the ILPA. “Consequently, the hundreds of [limited partnership agreements] developed each year are the product of bespoke efforts and one-off negotiations that come with excessive cost to both GPs and LPs. We encourage all industry stakeholders to review the ILPA model [limited partnership agreement] and use it as a basis for a more effective process, with the confidence that the provisions therein are supported by the LP community.”

To help GPs, the model demonstrates “. . . a foundational component of an LP-friendly fundraise, recommending legal language deemed as fair and reasonable by the LP community,” the release noted.

For new managers, the model will be especially helpful for following best practices, attracting new LP capital and minimizing legal costs, the association said.

The model agreement was developed by a group of approximately 20 internal and external counsel representing the GP and LP communities and went through a consultation process.