What Is an Information Memorandum (IM) in a Private Fund?

An Information Memorandum (IM) is the primary document a private fund manager issues to prospective investors to describe the fund's investment strategy, terms, fees, governance, risk factors, and legal structure ahead of a capital raise. Called a Private Placement Memorandum (PPM) in the United States, the IM is the document on which an investor makes their commitment decision.

This post defines the Information Memorandum, walks through its standard sections, distinguishes it from the trust deed and the subscription document, covers ASIC and FMA disclosure requirements for wholesale and retail funds, and explains how the speed and quality of the onboarding workflow that follows the IM has become part of LP operational due diligence on the manager.

Definition and scope

An Information Memorandum is the offer document for a private fund. It describes:

• What the fund will invest in (strategy and mandate).
• Who is managing it (team, track record, ownership).
• The economic terms (fees, carry, distribution waterfall, investment period, fund term).
• The legal and governance structure (trustee, RE, custodian, auditor, jurisdiction).
• The principal risks of the investment.
• The process by which an investor commits and the documents they must sign.

It is the marketing document, the disclosure document, and the structural reference document for the fund. In Australia and New Zealand it is typically called an Information Memorandum for wholesale offers, or a Product Disclosure Statement for retail offers under the Corporations Act. In the US it is called a Private Placement Memorandum (PPM) for Regulation D offerings.

For wholesale private funds in Australia, the IM is the primary disclosure document because the PDS regime does not apply to wholesale investors. For retail funds, the PDS is the regulated disclosure document, with an IM (where used) operating as a supplementary marketing piece.

Standard sections of an IM

A well-constructed Information Memorandum follows a consistent structure. While the order and depth vary, eight sections are standard.

1. Executive summary and fund overview

A two-to-four-page summary covering the fund name, structure, target size, key economic terms, and headline strategy. The executive summary is the first read for most LPs and frequently the only document a screening investor will examine before deciding whether to engage further.

2. Investment strategy and mandate

The detailed description of what the fund will invest in: target asset class (real estate, private credit, private equity, venture capital, infrastructure), geography, deal size, sector focus, leverage policy, ESG framework, and any concentration limits. Sophisticated LPs read this section closely to test whether the strategy is differentiated and whether the fund's resources match the stated ambition.

3. Track record and team

The track record of the fund manager, including historical funds, gross and net IRR, multiples of invested capital, distributions to paid-in capital, and attribution of returns to specific individuals where relevant. The team section profiles the partners, senior investment professionals, and operational leadership. LP due diligence weights this section heavily. Track records are validated through reference checks and prior-fund data requests.

4. Fund terms

The economic and structural terms of the fund. Standard elements include:

• Management fee. Typically 1–2% of committed or invested capital, charged annually.
• Carried interest. Typically 20% of profits over a preferred return (hurdle), commonly 8%.
• Distribution waterfall. Whether the fund operates a European waterfall (whole-fund) or American waterfall (deal-by-deal), and the catch-up mechanics.
• Investment period and fund term. Investment period typically four to five years. Fund term typically ten years with one or two one-year extensions.
• Recycling and reinvestment provisions. Whether realised principal can be recycled into new investments during the investment period.
• Key person and no-fault divorce provisions. Investor protections triggered by the departure of named investment professionals or by LP super-majority vote.

5. Governance

The legal structure of the fund. For Australian funds, this typically includes the trustee or Responsible Entity, the custodian (if separate), the auditor, the lawyers, the tax adviser, and the fund administrator. For closed-end PE and real estate funds, the LPAC (limited partner advisory committee) is described here.

6. Risk factors

A detailed description of the principal risks of the investment: market risk, liquidity risk, manager risk, regulatory risk, jurisdictional risk, ESG risk, and any strategy-specific risks. The risk factors section is treated by Australian and US courts as part of the manager's disclosure defence in any dispute. It is drafted by external counsel and reviewed line by line.

7. Subscription process and minimum commitment

The mechanical process by which an investor commits. Includes the minimum commitment size (commonly $500k–$1m for funds relying on the product value test, with lower thresholds where the manager admits investors through the sophisticated or professional investor pathway), the subscription document execution process, AML/KYC requirements, the funding mechanics (commitment, first close, subsequent closes, capital calls), and the timeline from expression of interest to admission.

8. Legal and regulatory disclosures

Jurisdiction-specific disclosures, including ASIC or SEC disclaimers, wholesale investor certification statements, tax treatment summaries, foreign investor provisions, and any required regulatory legends.

How the IM differs from the trust deed and the subscription document

LPs often see three documents in close succession. They serve different purposes.

• The Information Memorandum is the descriptive and marketing document. It summarises the fund and explains the terms in narrative form.
• The trust deed (or LPA in US-style structures) is the binding legal instrument that governs the fund. Where the IM and trust deed conflict, the trust deed prevails. Sophisticated LPs read the trust deed closely. Many engage external counsel to mark up the deed during their commitment process.
• The subscription document is the contract through which an individual investor commits to the fund. It records the investor's identity, commitment amount, AML/KYC information, wholesale investor certification (where applicable), and execution of the trust deed adherence.

The three documents must be internally consistent. Inconsistencies between the IM, the trust deed, and the subscription document are the most common source of post-close legal disputes and the most common operational due diligence finding from sophisticated LPs.

ASIC and FMA disclosure requirements

Australia: wholesale vs retail

The Corporations Act distinguishes between wholesale and retail investors. For MIS interests, an investor qualifies as a wholesale client under section 761G when they commit $500,000 or more (the product value test), satisfy the net assets / gross income test ($2.5m net assets or $250k gross income for two consecutive years, evidenced by an accountant's certificate), or are certified as a professional investor. Wholesale-only funds can be offered through an Information Memorandum without a Product Disclosure Statement (PDS).

Retail investors must be offered an interest in a fund through a registered MIS with a compliant PDS. The PDS is governed by ASIC Regulatory Guide 168, which sets out content, format, and disclosure requirements. Retail funds typically also produce a Target Market Determination (TMD) under the design and distribution obligations introduced by the Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019.

For wholesale-only funds, ASIC does not prescribe IM content. However, the IM is treated as financial product disclosure for the purposes of the misleading and deceptive conduct provisions of the Corporations Act and the ASIC Act. Accuracy and balance of disclosure remain enforceable obligations.

New Zealand

Under the Financial Markets Conduct Act 2013, retail investors must be offered an interest in an MIS through a Product Disclosure Statement lodged with the FMA. Wholesale investors, within the meaning of clause 3 of Schedule 1 of the FMC Act, can be offered through an Information Memorandum without a PDS. As in Australia, the IM is subject to fair-dealing provisions even when not lodged with the regulator.

United States

A Private Placement Memorandum (PPM) is the standard offer document for Regulation D offerings to accredited investors. Regulation D imposes specific content requirements for offerings to non-accredited investors. Offerings limited to accredited investors have greater flexibility but remain subject to anti-fraud provisions under Rule 10b-5.

Why IM quality affects fundraising

Two things have changed in the last three years.

First, LPs read more documents than they used to. Operational due diligence on private fund managers now examines the IM, the trust deed, the subscription documents, the valuation policy, the AML/KYC framework, and the fund administration service agreement. The internal consistency and operational quality of these documents has become a screening signal.

Second, the workflow after the IM has become part of the manager's perceived operational quality. An investor who receives a polished IM, then a paper subscription document with a manual AML/KYC process taking four weeks, draws inferences about the manager's operations from that gap. Conversely, a manager whose IM flows into a digital subscription document, automated AML/KYC, and same-day investor portal access signals operational maturity.

For emerging and growth-stage managers in Australia and New Zealand competing for wholesale capital from family offices, foundations, and high-net-worth investors, this signal has become a meaningful differentiator. The IM is the introduction. The subscription workflow is the first proof.

How Caruso supports the IM-to-commitment workflow

Caruso's investor portal connects the IM, the digital subscription document, AML/KYC, and the investor portal in a single workflow. Once an investor has received the IM and decided to commit, they enter their details, sign the subscription document digitally, complete AML/KYC through automated identity verification and watchlist screening, and gain access to the investor portal, typically within hours, not weeks. Caruso's fund administration services take the operational workflow from there, with capital call notices, distribution statements, tax packs, and reporting flowing through the same platform.

For a fund manager preparing for a wholesale capital raise in Australia or New Zealand, the practical effect is that the IM becomes the first step in an integrated, digital commitment workflow rather than the start of a paper-based scramble.

Closing thought

The Information Memorandum remains the central document in any private fund raise. Its content matters, its accuracy matters, and its consistency with the trust deed and subscription documents matters. What has changed is what happens immediately after the LP reads it. The funds that pair a well-constructed IM with a digital, fast, integrated onboarding workflow are the funds that close commitments faster and with less LP friction.