AIF Key Person Risk: What to Ask Before You Commit Capital

In many alternative strategies, the real edge is the team. Key person risk is the risk that a critical decision-maker leaves, reduces involvement, or becomes unavailable. Investors should not ignore this just because a brand is strong.

Good AIF documents address key person risk with clear clauses: what triggers a key person event, what happens to deployment, and what investor rights exist. This is not about expecting problems. It is about knowing the plan if problems occur.

When you commit to an AIF, you are committing to people as much as process. Ask how the team is structured, how decisions are made, and what continuity looks like.

Truvest Insight: Team continuity is a risk metric.

Image to create: A 'team chart' showing key roles with a 'backup' shadow role behind each.

Disclaimer: Educational content only.