Chart: Which Type of Private Equity Investors Are Most Resistant to Letting An Underperforming Fund Change It’s Terms?

limited partners, private equity

Consider this scenario: A limited partner invests money in a private equity fund under a certain set of terms and conditions. But eventually, it becomes clear the fund isn’t achieving the preferred performance and the general partner (PE firm) approaches the LP to re-set the terms of the deal.

A recent survey asked institutional investors whether they would comply with the GP’s request.

Turns out, pension funds would be more resistant to the changing of terms that any other type of institutional investor – over 60 percent said they would refuse to re-set terms.

 

Chart credit: Coller Capital

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