Private Equity Portfolio Company Fees

摘要: In private equity, General Partners (GPs) may receive fee payments from companies whose board they control. This paper describes the related contracts and shows that these sum up to $20 billion evenly distributed over last twenty years, representing 6% of equity invested by GPs on behalf their investors. Fees do not vary according business cycles, company characteristics, or GP performance. significantly across are persistent within GPs. charging least raised more capital post financial crisis. went public distinctively increased fees prior event. We discuss how results can be explained optimal contracting versus tunneling theories.