Managing a potential misalignment of interests
Watson Wyatt’s world class Investment Practice has recently published a paper arguing that private equity management fees form too high a share of a general partners’ (GPs) compensation.
Negotiating private equity terms has previously been challenging due to limited capacity in high quality GPs and the restricted ability of limited partners (LPs) to pool their bargaining power. The former has clearly contributed significantly to the latter.
In this paper, Watson Wyatt:
Highlights how it thinks about fees across asset classes and explains how it is applying this thinking to private equity
Discusses currently accepted fees and terms in order to encourage debate in the LP community, with the ultimate purpose of eliminating some of the more egregious terms seen in private equity
Discusses additional features of terms that are not yet common in the private equity community but would represent significant progress in improving alignment for LPs.
To receive a free copy of the paper, please contact:
Robert Richter
Compensation Consultant
Watson Wyatt Middle East
Premises No.1, 8th Floor, Block 10
Dubai International Academic City
00971 44363513 (direct)
00971 43640096 (office)
00971 501895816 (mobile)
Robert.Richter@watsonwyatt.com
www.watsonwyatt.com
