A Key Person Clause is a provision in a fund’s governing documents that restricts new investments (or triggers other consequences) if specified key individuals cease to devote the required time to the fund, depart, or become incapacitated. For LP protection, a Key Person Clause is intended to ensure the team investors backed is actually running the strategy, and the Key Person Clause typically specifies who the key persons are, what events trigger it, and how it can be cured.
