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Matthew Goldstein Quoted in Private Equity International on Competitive Fee Structures in the Private Equity Fund Marketplace
November 25, 2020
Corporate partner Matthew Goldstein was quoted in a recent article in Private Equity International, “Flexible fee structures: Should you consider one?” The article discusses how some private equity firms are responding to changing investor preferences by offering competitive fee structures to incentivize invested capital over committed capital. Matt noted that private equity firms who proactively offer fee discounts on invested capital can garner goodwill with investors by showing flexibility, and can potentially raise capital more quickly than normal; however, such fee structures are unique to each manager’s investment strategy and most likely will not be utilized outside of the fund of funds marketplace. For example, Matt noted, private equity firm Hamilton Lane’s dual-fee structure, while innovative, “is exclusive to this particular manager’s investment strategy, as its clients will bear fund-level fees at multiple levels of the structure, whereas that is not the case in a traditional private equity buyout fund.”
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