Private Placement Memorandum (PPM)

The PPM, also called an offering memorandum, is the primary disclosure document for a privately offered fund. It covers the investment objective and strategy, risk factors, fees and expenses, subscription and redemption terms, valuation policy, conflicts of interest, tax considerations and the identity of key service providers such as the fund administrator, auditor and custodian.

Operationally, the PPM is a source of rules that the accounting and investor services teams must apply, including NAV frequency, dealing cut-offs, notice periods, management fee and performance fee terms, high-water mark mechanics and gating provisions.

Pitfalls include operational practice drifting away from what the PPM says, fee and dealing terms that are ambiguous or inconsistent with the LPA or articles, and failing to update the PPM when service providers or terms change. Operations teams often maintain a terms summary that maps each PPM provision to the system setting or procedure that applies it.