Answer-first summary for fast verification
Answer: limited partners to recover a portion of the general partner's performance fee.
A clawback provision in alternative investments allows limited partners (LPs) to reclaim a portion of the general partner's (GP) performance fee if the GP accrues an incentive fee on unrealized gains that are later reversed. This ensures that LPs are not unfairly charged for performance that is not ultimately realized. Options A and B are incorrect because the clawback provision does not pertain to recovering performance losses or the GP reclaiming distributions from LPs.
Author: LeetQuiz Editorial Team
Ultimate access to all questions.
No comments yet.
In alternative investments, a clawback provision represents the right of:
A
limited partners to recover performance losses.
B
the general partner to recover a portion of limited partners' distributions.
C
limited partners to recover a portion of the general partner's performance fee.