GLOBAL - Almost three in four (72.7%) respondents said they believed the additional costs incurred by their private equity managers to provide supplementary and timelier information would be passed on to pension funds.
At a recent conference held in London, a panel of private equity fund managers (GPs) pointed out investors such as pension funds (LPs) were requiring increasing volumes of information from their GPs following the market turmoil of 2007 and 2008.
But GPs denied they would charge LPs for the extra costs involved.
One respondent said: “I hope the 2 (% management fee) and 20 (% performance fee) model does not increase as I believe it is too high for the potential return anyway. However, if it does not increase to cover the extra costs then I believe that the GP will skimp on other services to cover the additional costs, meaning LPs pay anyway.”
Over a quarter of our respondents believed these additional costs would be ultimately borne by GPs.
Another respondent said: “The 2-20 fee arrangement provides plenty of scope for GPs to provide relevant information to their LPs.”
