An investment management agreement (IMA) is the contract between the fund and the management company that authorizes the management company to provide investment advisory and management services to the fund in exchange for the management fee.
Why It Matters
The IMA is what connects the management company to the fund. Without it, the management company has no contractual basis to collect fees or make investment decisions on behalf of the fund. The IMA also defines the scope of services the management company will provide, which matters for liability allocation between the fund entity and the management company entity.
Key Details
- Specifies the services the management company will provide, including investment management, investor reporting, and fund operations.
- Sets fee terms that must mirror the management fee provisions in the LPA. Any inconsistency between the IMA and the LPA creates audit and compliance risk.
- Defines termination rights for both parties, including what happens to accrued but unpaid fees if the agreement ends early.
- Required for multi-entity fund structures where the GP entity and the management company entity are separate legal persons.
- Should be consistent with the management company's Form ADV disclosures filed with the SEC.
For more on fund formation documents, see Private Fund Documents.
Capital Company handles IMA administration and fee reconciliation as part of fund administration.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation.