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Inside Investcorp’s compensation strategy

SEC enforcement action timeline; Investcorp on balancing carry and co-investment for compensation; Luxembourg gets love from the big US PE houses; Listing vehicles on the LSE.

If you didn’t navigate to our site, you may have missed our piece on European PE compensation, which you can find here. I mentioned it in yesterday’s email (“The SEC gets real”), but didn’t include the link.

Investcorp on carry and co-investment: Speaking of compensation, Investcorp’s head of executive compensation, Dominic Elias, gives us a very interesting look at how firms can mingle carry and co-investment to keep its team focused and rewarded while aligning their interests with LPs. Elias looks at the various ways a firm can approach the use of co-investment as both a retention and alignment tool, including potentially directing employee bonus deferrals into a fund, and applying vesting to co-invested amounts that would have otherwise been deferred into shares or cash, as well as leveraging co-investment.

Luxembourg love: The big US PE houses are increasingly choosing Luxembourg as the jurisdiction of choice to structure their funds, according to a survey from the Association of the Luxembourg Fund Industry and Deloitte. Obviously, Luxembourg has been a major beneficiary of Brexit, as firms move their European headquarters to the country in order to stay in the single market. But the development of large US houses moving their fund structuring operations there is interesting. The report says big funds are taking advantage of unregulated or lightly regulated fund structures under the Alternative Investment Fund Managers Directive, which mandates regulation at the manager level, as opposed to the fund level.

Networking: For those of you interested in real estate, advanced pricing for sister publication PERE’s own CFOs & COOs Forum in New York this April ends on Friday. You can book it here.

Listing on LSE: In this sponsored article, JTC’s Wouter Plantenga and Simon Gordon discuss why more US investment managers are listing vehicles on the London Stock Exchange, and why it’s a good move.  

Email prepared by Graham Bippart