managing-tender-offer-processes

name	managing-tender-offer-processes
description	Coordinates tender offer execution with offer terms, election mechanics, proration, and transfer documentation for LP interests. Use when managing tender offers, structuring LP elections, or coordinating interest transfers.
tags	["management","secondaries-and-gp-led"]
metadata	{"author":"casemark","practice_areas":["Secondaries","GP-Led Transactions","LP Portfolio Management"],"document_types":["Management Report"],"skill_modes":["Management","Coordination"]}

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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

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]