A key person clause names the people investors are backing. If they leave or stop giving the fund enough time, new deals can stop until investors decide what happens next.
What the film says
In private equity, one person quitting can stop a two billion dollar fund from buying companies. Investors don't just back a firm. They back named people. The fund agreement lists them. If they leave, or stop giving the fund enough of their time, that's a key person event. New deals can stop. Then investors decide what happens next. That's a key person clause.
In the glossary: Key person
A simple example with round numbers, not advice. Terms vary by fund.
See an error?