The difficult fundraising environment has impacted large fund managers and emerging managers differently. What has been relatively consistent across all fund managers, however, is that the balance of negotiating power has shifted somewhat in favor of LPs. Beyond typical negotiations around fund economics, what is interesting is that LPs have been using that power to extract more favorable terms in fund documents meant to improve GP‑LP alignment and to enhance governance provisions. Preqin detailed those and other trends in economic and non-economic private fund terms in its 2024 Private Capital Fund Terms Advisor report (Report), as supplemented by a webinar that elaborated on the Report findings, featuring Brigid Connor, assistance vice president, fees research lead; and Heather Heys, vice president, legal insights. This second article in a two-part series examines how a shift in GP and LP dynamics has manifested in changes in fund formation practices and governance provisions in fund documents. The first article summarized the trends and differences in management fees, performance fees and attendant fee-related considerations across PE, private debt and real estate funds. See “How Key PE Fund Terms Are Being Shaped by Current Fundraising Challenges, Liquidity Needs and Distinct Shifts in the Market” (Feb. 9, 2023).