Guaranty fund exposure inside a co-GP structure rarely shows up in the credit memo
When a deal is structured with two general partners sharing promotes, the guaranty on the agency loan almost always lands on one name. The other co-GP sits in the waterfall but not on the recourse carve-outs, and that asymmetry goes unmarked in most LP disclosure documents I have read through. The problem surfaces when the guaranteeing entity has capacity constraints elsewhere: a lender covenant on a separate deal, a net worth test tied to another loan, or a pending refinance that pulls liquidity. None of that shows in the co-GP's presentation materials, and the LP has no obvious path to seeing it unless the disclosure section was written to require it. What I want to know from people who have sat inside these structures is how often the non-guaranteeing co-GP has a contractual obligation to step in if the guarantor's capacity deteriorates, and whether anyone has seen that obligation actually documented with teeth rather than as a best-efforts clause buried in the JV agreement.
