Years of widespread use have produced a clearly established market for the terms and structures of traditional blind-pool private equity (PE) funds. Pledge funds, on the other hand, are hybrid structures with unique features novel to both investors and PE sponsors. For those individuals that properly familiarize themselves with its features, the pledge fund structure can provide an enticing combination of benefits to investors (i.e., the soft commitment of the opt-in mechanics) and sponsors (i.e., faster carried interest payments that do not net losing investments against winning ones). This three-part series details some material considerations for sponsors deciding whether to adopt the pledge fund structure, including issues that arise when administering a fund. This second article analyzes key features to address in the investment management agreement when forming a pledge fund. The first article described benefits of the pledge fund structure that sponsors often find compelling, including ways the fee structure can yield enhanced carried interest to sponsors. The third article will critique the deal uncertainty issues sponsors can confront in an auction process, as well as ways to structure the fund’s investment vehicle. For more on alternative PE fund structures, see our two-part series on selling minority stakes in PE firms: “Recent Trends and Structural Considerations” (Apr. 2, 2019); and “The Appeal of Stable and Early Income Streams” (Apr. 9, 2019).