Bad club deals rarely die of a bad asset. They die of a question without a written answer: who decides? The day you must arbitrate between selling and refinancing, accepting an offer or waiting, committing works or distributing — that day, it is too late to draft. A vehicle's governance is written at incorporation, when everyone agrees, precisely because one day everyone will not.
Three tiers of decisions
Our vehicles systematically distinguish three levels. Routine management acts — paying a supplier, signing a lease within the approved grid, calling a scheduled tranche — belong to the manager, without consultation: that is their trade, and paralysis costs more than a detail error. Major acts — selling the asset, mortgaging it, amending the budget beyond a written threshold, extending the vehicle's term — require investor approval at a qualified majority defined in advance. Between the two, an intermediate zone — contained overruns, works arbitrations — belongs to a restricted committee, with a duty to report to all.
The useful exercise is not drawing up that list — any template provides one. It is quantifying it: from what amount does an overrun change tiers? An unquantified threshold is a decorative clause.
Conflicts of interest are handled in writing
In a club deal, the structuring house is often also co-investor, sometimes manager, sometimes tied to the operator. These situations are not anomalies — they are the very fabric of the model, and they are handled through transparency: written declaration of everyone's interests at incorporation, the manager's recusal on decisions where it is judge and party, and the investors' right to have any related-party transaction independently appraised. A declared, framed conflict is a governance fact; a discovered conflict is a breach of trust.
You do not ask an investor to trust. You give them the means to verify — trust comes from there.
Information is an obligation, not a courtesy
The pact sets what each investor receives and when: periodic reporting — progress, cash, variances —, annual accounts, immediate notice of any significant event. Two principles guide us. Equality: all investors receive the same information at the same time, whatever their share. Traceability: what was decided, by whom, on what basis — recorded and consultable. That is exactly what an investor space worthy of the name should make banal.
The exit, written at the entry
The vehicle's term, liquidity windows, the fate of an investor defaulting on a capital call, share transfer clauses — pre-emption, approval, tag-along. None of these clauses is pleasant to negotiate at the moment everyone is delighted to invest together. All are indispensable. A vehicle you know how to leave is a vehicle you can enter serenely.