Skip to content
Dark MatterDark Matter
GuidesBrownfield Onboarding

LP Interest Wrap

Step-by-step guide to wrapping a fund LP interest into a DMTR-encoded position, with optional lookthrough decomposition to individual portfolio companies.

Overview

Wrapping a limited partnership interest in a venture, PE, or credit fund into a DOIV LLC produces Position Objects that represent the LP's economic exposure. Optionally, the holder can elect lookthrough decomposition to create per-company series positions.

Without lookthrough: the position goes from L3 to L4 (single wrapped position representing the entire LP interest).

With lookthrough: the position goes from L3 to L5 (multiple series positions, each representing exposure to a single portfolio company).

Prerequisites

  • LP interest is fully committed and at least partially funded
  • Holder has a copy of the Limited Partnership Agreement (LPA) and any side letters
  • Holder understands whether GP consent is required for assignment (check LPA Section [Transfer Restrictions])
  • For lookthrough: holder has access to the fund's most recent NAV report

Step 1: Register the LP interest at L1-L3

Register the position in the DMTR registry:

  1. Upload the LPA, subscription agreement, and any side letters
  2. Extract: fund name, commitment amount, funded amount, partnership percentage, carry structure
  3. Encode transfer restrictions: GP consent requirement, lockup period, ROFR, minimum transfer size

Before initiating the contribution, check whether the GP has a pre-consent policy on DMTR. If the GP already uses DMTR for fund administration or greenfield formations (e.g., Megalith), they may have pre-consented to DMTR-mediated contributions under specified conditions.

If pre-consented: the consent chain step is bypassed. The contribution can proceed without waiting for GP approval.

If not pre-consented: the contribution agreement will trigger a consent request through the DMTR consent chain, and the contribution will not be effective until the GP approves.

Step 3: Choose entity structure

Standard LLC (L4): a single DOIV LLC holds the entire LP interest. The holder receives 100% of the membership units as one Position Object. Simpler, faster, cheaper.

Series LLC (L5): a Delaware Series LLC with per-company protected series. Each series represents the holder's pro-rata exposure to a single portfolio company. Each series is a separate Position Object. More complex, but enables granular exposure trading and collateral pledging.

The decision does not need to be permanent — a standard LLC can be converted to a Series LLC later.

Step 4: Form the entity

  • Standard LLC: ~$640 (filing + registered agent)
  • Series LLC: ~$440 (single filing, no per-series filing or franchise tax)

The operating agreement is generated from the DMTR template. For Series LLC, a series designation document is generated for each portfolio company.

Step 5: Execute the contribution

Two documents:

  1. Contribution Agreement (LP interest variant) — covers:

    • Description of the LP interest (fund, commitment, funded amount, partnership percentage)
    • IRC 721 non-recognition treatment
    • Hot assets analysis flag (IRC 751 — the template includes a representation about hot asset exposure)
    • GP consent mechanics
    • Transfer Agent designation

  2. LP Interest Assignment Agreement — the instrument that assigns the LP interest from the holder to the DOIV LLC. Includes GP consent signature block if required.

If the LPA requires GP consent:

  • DMTR routes a consent request through the consent chain
  • The GP receives the request via their DMTR dashboard or e-signature workflow
  • The GP reviews the assignment details and approves or denies
  • The consent (or denial) is recorded as an event in the DMTR registry

The contribution is not effective until consent is granted.

Step 7: Register positions

Standard LLC (L4): one Position Object is created:

  • asset.vehicle_class: doiv_lp_interest
  • provenance.acquired_via: contribution
  • provenance.brownfield_source: original holder, fund, commitment, partnership percentage

Series LLC (L5): one Position Object per portfolio company:

  • Each series has asset.underlying.company referencing the portfolio company
  • NAV attribution computes each series' valuation from the fund admin's NAV report
  • economic_rights.sharing_percentage records the holder's pro-rata share

Once series positions are registered, the lookthrough engine keeps them current:

  1. Fund admin publishes a NAV report (quarterly or more frequent)
  2. The attribution engine maps fund-level valuations to series positions
  3. Each series' valuation.current_mark is updated
  4. position.mark_updated events are emitted

See Lookthrough Decomposition for the full design.

Tax considerations

  • IRC 721: contribution of LP interest to an LLC is generally non-recognition
  • IRC 704(c): built-in gain or loss at contribution date must be allocated to the contributing partner
  • IRC 751: if the fund holds "hot assets" (unrealized receivables, inventory), the contribution may trigger partial gain recognition — the template flags this for review
  • K-1 implications: the SPV becomes the LP of record and receives K-1s from the fund. The SPV passes through to the holder (single-member) or to series holders (multi-series)
Edit this page on GitHub

Last reviewed: June 12, 2026

Was this page helpful?

Direct Equity Wrap

Step-by-step guide to wrapping directly held shares (83(b), exercised options, RSAs) into a DMTR-encoded DOIV position.

GP Stake Wrap

Step-by-step guide to wrapping a general partner interest — carry, management fees, governance rights — into a DMTR-encoded position.

On this page

OverviewPrerequisitesStep 1: Register the LP interest at L1-L3Step 2: Check GP pre-consentStep 3: Choose entity structureStep 4: Form the entityStep 5: Execute the contributionStep 6: GP consent (if required)Step 7: Register positionsNAV attribution for lookthroughTax considerationsRelated