The SEC’s push was likely about **governance legitimacy and LP protection**:
- An **Advisory Committee / LPAC** is a small, advisory subset of LPs
- A **Majority in Interest of LPs** better represents the fund’s actual economic owners
- For **fund-wide conflicts**, broader consent reduces the risk that a small committee is seen as binding everyone else
- It also fits **institutional diligence expectations**, where conflicts, governance, and fund administration are heavily scrutinized
Related point: LPAC members often owe **no fiduciary duty**, which is another reason regulators may prefer broader LP approval for material conflicts.
References:
- https://decilehub.com/base/1-general_questions/163514-why-did-v3-0-move-conflict-of-interest-approval-from-the-advisory-committee-to-a-majority-in-interest-of-lps
- https://decilehub.com/base/1-general_questions/163750-why-does-the-advisory-committee-owe-no-fiduciary-duty
- An **Advisory Committee / LPAC** is a small, advisory subset of LPs
- A **Majority in Interest of LPs** better represents the fund’s actual economic owners
- For **fund-wide conflicts**, broader consent reduces the risk that a small committee is seen as binding everyone else
- It also fits **institutional diligence expectations**, where conflicts, governance, and fund administration are heavily scrutinized
Related point: LPAC members often owe **no fiduciary duty**, which is another reason regulators may prefer broader LP approval for material conflicts.
References:
- https://decilehub.com/base/1-general_questions/163514-why-did-v3-0-move-conflict-of-interest-approval-from-the-advisory-committee-to-a-majority-in-interest-of-lps
- https://decilehub.com/base/1-general_questions/163750-why-does-the-advisory-committee-owe-no-fiduciary-duty