According to Preqin's latest Private Equity Fund Terms Advisor report, 61% of institutional investors said they have rejected a private equity fund on the basis of unfavorable fund terms.
Asked what specific fund terms could be improved to better align limited and general partner interests, 54% of LPs said management fees. Preqin also noted that the proportion of LPs unhappy with the payment of fees on uninvested capital rose significantly in the past 12 months, with 39% of survey respondents saying this was an area for improvement.
Carry structure and the amount committed by the GP were also cited as the main areas terms where interests can be better aligned.
