CaseMark Managing Tender Offer Processes
When To Use
- A GP or third-party buyer is launching a tender offer for LP interests in a fund
- An LP portfolio manager needs to evaluate and respond to an incoming tender offer
- A secondaries advisor is coordinating election mechanics and proration across multiple LPs
- A GP-led continuation or strip-sale requires structured LP election and rollover/cash-out processing
Inputs To Gather
- Offer documents: Tender offer memorandum, purchase agreement (or term sheet), and any side letters modifying transfer rights
- Fund governing documents: LPA provisions on transfer restrictions, ROFR/consent requirements, minimum commitment thresholds, and anti-embarrassment clauses
- LP roster data: Current capital account balances, unfunded commitments, NAV as of reference date, contact details for each LP and their counsel
- Pricing terms: Offered price as percentage of NAV, reference NAV date, any price adjustment mechanisms (true-up, interim distribution credits)
- Election structure: Cash-out vs. rollover options, partial tender allowances, minimum/maximum tender amounts per LP
- Timeline: Offer launch date, election deadline, withdrawal rights window, expected closing date, any extension provisions
- Regulatory and tax considerations: ERISA LP percentage, tax-exempt investor constraints, UBTI concerns, foreign LP withholding requirements [VERIFY jurisdiction-specific rules]
Workflow
Map transfer mechanics against the LPA
- Confirm GP consent requirements and whether consent has been pre-arranged
- Identify ROFR holders and determine if ROFR has been waived or must be run
- Check for tag-along/drag-along triggers based on aggregate tender size
- Flag any LP-specific side letter provisions affecting transferability
Structure election options and proration rules
- Define cash-out and rollover alternatives with clear economic terms for each
- Set minimum and maximum tender amounts; determine whether partial elections are permitted
- Draft proration methodology: pro rata by tendered amount, priority tiers (e.g., small LPs first), or lottery [VERIFY if LPA prescribes method]
- Address treatment of unfunded commitments — whether buyer assumes them, they are reduced, or they remain with the seller
Prepare and distribute offer materials
- Draft tender offer memorandum with pricing, timeline, election form, and risk factors
- Include election/transmittal letter with clear instructions and deadline
- Distribute to all eligible LPs with confirmation of receipt tracking
- Coordinate Q&A process — designate a single point of contact for LP inquiries
Manage election period
- Track election submissions against the LP roster in real time
- Confirm each election form is properly executed and complete (signatures, amounts, selected option)
- Monitor aggregate tender volume against any cap; flag proration trigger points early
- Process any withdrawal requests within the permitted withdrawal window
- Send reminder notices at defined intervals before the election deadline
Run proration and finalize allocations
- Apply proration formula once the election deadline closes
- Notify each LP of their final accepted tender amount and selected option
- Prepare allocation schedule showing pre- and post-transaction ownership percentages
- Circulate revised capital account statements reflecting the transfer
Execute transfer documentation and closing
- Draft and circulate transfer agreements (assignment and assumption of LP interest)
- Obtain GP consent letters and any required ROFR waiver confirmations
- Coordinate escrow funding and release mechanics for purchase price
- Process amended Schedule of Partners and deliver to fund administrator
- File any required regulatory notices (Form D amendments, blue sky filings) [VERIFY applicable filing requirements]
Post-closing reconciliation
- Confirm capital account rebalancing on fund administrator books
- Reconcile interim distributions between reference date and closing — apply true-up payments
- Distribute final closing confirmation to all participating LPs and buyer(s)
- Archive complete transaction record: elections, proration schedules, transfer docs, consent letters
Output
- Tender Offer Tracker: Real-time dashboard of LP elections received, pending, and withdrawn, with aggregate tender volume and proration status
- Proration Schedule: Final allocation table showing each LP's tendered amount, accepted amount, and proration factor applied
- Transfer Documentation Package: Executed assignment agreements, GP consent letters, ROFR waivers, and amended partnership schedule
- Closing Memorandum: Summary of transaction terms, timeline of key events, final pricing, aggregate participation rate, and post-closing capital structure
Quality Checks
- Every LP on the roster has been contacted and either submitted an election or confirmed non-participation
- Election forms are validated for completeness: correct entity name, authorized signatory, amount within permitted range, option clearly selected
- Proration math ties out — total accepted tender equals the lesser of aggregate elections and offer cap
- Transfer documents match the economic terms in the offer memorandum (price, adjustment mechanics, assumed obligations)
- GP consent and ROFR compliance are documented before any transfer is executed
- Interim distribution true-up calculations reconcile to fund administrator records
- All deadlines (election, withdrawal, closing) were met or properly extended per offer terms
- ERISA and tax-exempt investor thresholds are re-checked post-transaction to confirm the fund remains in compliance [VERIFY plan asset regulation limits]