SmartEsq has launched an AI-powered MFN Election tool that fully automates the Most Favored Nation process for private funds. It eliminates manual tagging and reduces legal costs, compressing a multi-week workflow into just hours. Purpose-built for fund counsel, the tool delivers speed, accuracy, and audit-ready outputs with no templates or training required.
NEW YORK, July 2, 2025 /PRNewswire-PRWeb/ -- SmartEsq, the legal intelligence platform for private funds, today announced the launch of its AI-Powered MFN Election tool, the first solution that fully automates the Most Favored Nation (MFN) election process. Purpose-built for private equity firms and fund formation counsel, the tool eliminates manual tagging, reduces legal costs, and compresses a multi-week process into just a few hours.
The MFN election process is one of the most tedious and risk-prone components of fund documentation. Legal teams must cross-compare terms across dozens of investors, assess eligibility against negotiated constraints, and compile election summaries under tight timeframes. With growing LP scrutiny and increasing fund complexity, the margin for error has all but disappeared. Yet most MFN tools on the market still rely on user-driven tagging, fixed templates, or rules-based workflows. These models introduce variability, slow adoption, and require weeks of onboarding and training.
SmartEsq's MFN Election tool eliminates this manual burden, automating the identification of MFN-eligible provisions and investor electability, and generating a complete MFN compendium and election forms with no tagging, templates, or training required.
Key benefits include:
- Faster turnaround: Reduces election processing time from weeks to hours.
- Lower legal spend: Minimizes the need for manual review and outside counsel hours.
- Improved accuracy: Reduces the risk of missed elections or misapplied provisions.
- Real-time visibility: Keeps compendiums current and enables faster LP response.
"This is a game-changing tool for fund counsel," said Esther Chiang, CEO and Co-Founder of SmartEsq. "We built it to solve the actual bottlenecks in the MFN process. It's fast, accurate, and designed to scale as funds grow."
Key Features
The MFN Election tool is trained on a proprietary legal taxonomy developed by fund formation experts. It can instantly parse side letter language, identify MFN-eligible terms, determine electability across investor profiles, and produce clear, review-ready outputs. Unlike other tools that rely on user tagging or rules-based templates, SmartEsq's engine operates independently with minimal input, accelerating review timelines and eliminating operational bottlenecks.
- No tagging required: Automatically identifies electable MFN provisions using pre-trained legal intelligence.
- Electability mapping: AI-powered analysis determines which investors may adopt which provisions based on individualized eligibility criteria, eliminating manual error while ensuring consistent, defensible interpretation of nuanced side letter provisions.
- Audit-ready outputs: Compiles election forms and compendiums with full traceability, supporting LP reporting and regulatory scrutiny.
- Flexible deployment: Available as a standalone tool or integrated into SmartEsq's post-closing workflow suite.
Unlocking Strategic Value By automating the core MFN workflow, the new election tool enables new levels of strategic oversight, enabling:
- Cross-fund compendiums to identify trends and align future side letter strategies.
- Historical benchmarking for negotiations and internal knowledge-building.
- Rapid response to LP amendment requests or fund restructuring events.
- Conversational search through integration with SmartEsq's AI assistant, Sandra.
- Cross-fund analysis of side letter obligations and patterns in negotiated terms, with rapid surfacing of relevant precedent.
The MFN Election Tool's AI engine is trained specifically for the private funds sector and built to deliver consistent, high-quality outputs immediately, delivering speed, clarity, and defensibility—without additional lift. Its implementation frees legal teams to focus on negotiation, risk management, and long- term fund structuring.
About SmartEsq
SmartEsq is a legal tech platform built for private capital markets. From fund formation to post-closing compliance, SmartEsq delivers AI-powered tools that streamline legal workflows, reduce risk, and support scalable operations. Its solutions are trusted by GP firms, fund administrators, and top law firms across the industry. To request a demo or learn more, visit www.smartesq.ai
Media Contact
Katherine Loanzon, SmartEsq.ai, 1 2125001219, [email protected], www.smartesq.ai
SOURCE SmartEsq.ai
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