How to Issue Side Letters to Investors?

Side letters allow fund managers to provide customized terms to specific investors within a deal. These terms often include negotiated fee structures, such as modified management fees or carry percentages, that differ from the default terms applied to the rest of the investor group.

Allocations allows fund managers to issue side letters directly from the Fund Manager Dashboard, making it easy to apply updated fee terms and formally document these changes within the platform.

Once a side letter is issued, the system automatically generates the documentation and sends confirmation emails to both the fund manager and the investor.

Step 1: Navigate to the Deals Page

To begin issuing a side letter, open the Deals section from the platform sidebar.

The Deals page displays all deals associated with your account. From this list, locate and select the deal that contains the investor whose terms need to be updated.

Once you select the deal, you will be directed to the deal management page where all investors participating in the deal are listed.

Step 2: Locate the Investor

Within the deal page, navigate to the Investors section.

This section displays the full list of investors participating in the deal along with important information such as:

• Investor name

• Status

• KYC status

• Email address

• Investor type

• Subscription amount

• Fee structure

Use the investor list to locate the investor for whom you want to issue the side letter.

Step 3: Edit the Investor Terms

Next to each investor row, you will find an edit icon (pencil icon).

Clicking this icon opens the investor configuration panel, where you can update the investor’s specific deal terms.

Within this panel, you can modify the relevant fields that define the investor’s negotiated terms. This may include updates to the investor’s management fee percentage or other fee-related parameters associated with their investment.

Step 4: Issue the Side Letter

After entering the updated terms, submit the changes through the dashboard.

When the updated fee terms are applied, the platform will automatically generate the side letter documentation reflecting the customized agreement.

This documentation formally records the investor’s negotiated terms within the deal.

Confirmation and Notifications

Once the side letter has been issued:

• The platform generates the side letter documentation.

• A confirmation email is sent to both the fund manager and the investor.

• The updated fee structure is applied to the investor’s investment within the deal.

This ensures that both parties have a record of the updated agreement and that the platform reflects the correct investment terms.