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GPs Wooing LPs with Lower Fees

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October 2, 2014

Lower fees, co-investment opportunities, and preferential terms for signing early are becoming a stock in trade as PE fund managers seek large-sized allocations from limited partners (LPs) in a competitive market, reports PE Hub.

 

Citing the PE/VC Partnership Agreements Study 2014-2015, published by Thomson Reuters, the report says that about 14 percent of North American buyout funds “offer special incentives to come into a first close”, and 35 percent of funds of funds and secondary funds make similar concessions.

 

First close incentives related to the cost of investing in PE may be a trend, but not other kinds of “incentives” like plane tickets or limousine services, gifts, even a cup of coffee, due to the compliance risk, notes another PE Hub report.

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