No-fault removal lets a set share of investors, usually a supermajority, remove the manager or end the fund's investing without having to prove it did anything wrong. It is the strongest lever investors hold.
What the film says
In private equity, investors can fire the manager without a reason. It's called no-fault removal. No fraud. No breach. No finding of anything. It's just a vote. Say a hundred equal investors, and the bar is seventy-five percent. Seventy-four vote yes. The manager stays. One more vote. Seventy-five. The manager can be replaced. Or the fund can stop making new investments. It's separate from removal for cause, which turns on a defined event, like fraud. So why do investors care? It's the strongest lever they hold. That's why the number is negotiated so closely. No reason needed. Just the votes.
In the glossary: No-fault removal
A simple example with round numbers, not advice. Terms vary by fund.
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