This clause allows a financial company (like a private equity firm or investment fund) to share your confidential information with its investors or limited partners who have money invested in the fund. It's high-risk because investors are external parties with no direct relationship to you, and they may work for competitors or have conflicting interests. The legal principle here is that confidentiality is a property right—you own the right to control who knows your secrets, and giving it away to unknown third parties significantly weakens your protection. A fund's investors could number in the hundreds or thousands, making it impossible to control where your information goes.
If you must accept this, require the fund to get written confidentiality agreements from each investor before sharing, and limit sharing to only information the investors genuinely need to evaluate their investment. Alternatively, ask the fund to anonymize or redact sensitive details (like customer names or pricing) before sharing with investors. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause allows a financial company (like a private equity firm or investment fund) to share your confidential information with its investors or limited partners who have money invested in the fund.
Why should I care about this clause?
It's high-risk because investors are external parties with no direct relationship to you, and they may work for competitors or have conflicting interests.
What are my options?
The legal principle here is that confidentiality is a property right—you own the right to control who knows your secrets, and giving it away to unknown third parties significantly weakens your protection.
How does this affect small businesses?
A fund's investors could number in the hundreds or thousands, making it impossible to control where your information goes.