Remedial actions following key person events in investment funds

Key person provisions are an important part of fund governance. They are designed to safeguard investors if the departure or unavailability of key individuals could put a fund’s strategy and execution at risk. When this happens, funds typically suspend their investment period, halting new investments and giving investors time to reassess the fund’s direction and consider appropriate remedial actions.

This suspension is temporary and time-limited – lasting on average several months – allowing for thorough evaluation and collective decision-making, often involving LP or LP advisory committee (LPAC) approval before investment activity can resume. The process underscores a commitment to prudent oversight, balancing continuity of operations with robust investor protection.

Suspension of investment periods due to key person events

Investment periods are suspended following a key person event in 97% of private equity funds, 93% of real estate funds, and 91% of infrastructure funds, according to Preqin Term Intelligence data (Fig. 1).

This suspension typically results in an immediate pause on new investments, providing investors with time to assess the impact of the key person’s departure or unavailability. Importantly, this mechanism is generally intended as a temporary safeguard, creating space for evaluation and remedial action rather than representing a permanent cessation of investment activity.

Fig. 1: Private equity slightly ahead in investment period suspension following a key person event
Percentage of funds in which a key person event triggers the suspension of investment period by asset class

_{Source: Preqin Term Intelligence, data as of March 2026}

The data shows that the suspension of the investment period following a key person event is typically timebound but material in duration, with the average suspension lasting approximately 170 days in private equity funds, 184 in infrastructure funds, and 141 in real estate funds (Fig. 2).

These multi-month suspension periods reflect the time required for investors to assess the impact of the key person’s departure or unavailability, evaluate proposed remedial actions, and engage with the fund’s reinstatement framework. The length of the suspension underscores that reinstatement is not automatic, but instead contingent on formal governance processes – most commonly LP- or LPAC-led approval – which are designed to balance the need for continuity of investment activity against appropriate investor oversight and protection.

Fig. 2: Suspension averages around six months across private equity, infrastructure, and real estate funds
Average investment period suspension length

_{Source: Preqin Term Intelligence, data as of March 2026}

Reinstatement of investment periods and voting thresholds

In most cases, the LPA allows for the reinstatement of the investment period once the applicable governance mechanisms (which are primarily driven by LPs) have been satisfied. Approval by a majority of LP interests or the LPAC is the leading reinstatement pathway across all asset classes, accounting for approximately 62% of private equity funds, 60% of infrastructure funds, and 57% of real estate funds (Fig. 3).

This concentration underscores a strong preference for formal investor oversight when determining whether investment activity should resume. In those funds where reinstatement is not permitted, the investment period remains suspended. New investments are not made unless other remedial action is taken, such as appointing a replacement key person or, in rare circumstances, winding down the fund.

Fig. 3: Most common voting threshold for reinstatement of the investment period
Percentage of funds with LP-led or other voting thresholds for investment period reinstatement by asset class

_{Source: Preqin Term Intelligence, data as of March 2026}

The remaining outcomes, grouped as ‘Other’ in Fig. 3, represent a smaller but meaningful share of reinstatement mechanisms – approximately 38% in private equity, 40% in infrastructure, and 43% in real estate funds. These arrangements encompass a range of alternative structures, including different LP voting thresholds, limited instances of GP discretion, and hybrid approaches combining GP action with subsequent LP or LPAC approval.

The prevalence of investment period suspension and reinstatement processes following key person events reflects a strong focus on governance and investor protection across asset classes. While temporary pauses allow for careful consideration and remedial action, the resumption of investment activity is subject to clear, formal voting thresholds that prioritize investor oversight.

These practices help maintain stability and confidence within the fund structure, ensuring that the interests of all stakeholders are safeguarded during periods of transition.

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_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}