Boggs Interviewed on Management Fees by Pensions & Investments Magazine
Pressured Private Equity, Real Estate Firms Trim Management Fees
General partners heeding investors' complaints of unfair termsPensions & Investments
November 30, 2009 - Pensions & Investments looked to T. Hale Boggs, a partner in Manatt’s Venture Capital & Emerging Companies practice group, for insight into the recent trend of private equity and real estate fund managers cutting fees on existing and future funds. In an article titled “Pressured Private Equity, Real Estate Firms Trim Management Fees,” the publication reports that the largest private equity firms - those with funds $1 billion and larger - have cut their average management fees to 1.65% for funds being raised this year from 1.991% last year.
Smaller funds, according to Pensions & Investments, are lowering their fees as well. Firms sponsoring funds of less than $500 million in committed capital lowered management fees to an average of 1.98% for funds being raised this year, from 2.04% in 2008.
Venture capital firms are also feeling pressure to trim fees, Boggs said in the article.
“A lot of the economics and other terms in venture capital funds have moved toward the limited partner in the last 12 to 24 months,” he told the magazine. “It's a very different fundraising market. There's little liquidity for asset allocations and for those reasons limited partners have gotten better terms.”
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