Waterfalls

A long-standing aversion toward using technology and automated processes to calculate carry and waterfalls is slowly dissipating, but the private funds industry has some way to go before adoption takes hold across the board.

Petra Funds arrives as the weight of back-office burdens is set to grow. Regulators are starting to roll out proposals aimed at making private markets more transparent and leveling the playing field.

Whether it’s tenders, intervals, evergreens or hybrids, the private funds industry is seeing a re-emergence of novel fund structures. We spoke to managers and service providers trying to tap a growing base of investors.

Growth in separate accounts and retail evergreen products means the investment firm’s carry mix will change, its vice-chairman said on its latest earnings call.

The firm announced the acquisition of Investors Economic Assurance. It is the fund administrator’s third US-based acquisition in six months.

Todd Boudreau argues that ILPA’s model LPAs can give emerging managers an edge in a highly competitive market, helping to attract new relationships and reduce the costs and complexities of negotiation.

The organization hopes to spark debate with its new deal-by-deal model LPA, which incorporates recent changes to its whole-of-fund model LPA. Private Funds CFO spoke with some of the people who developed it ahead of the LPA’s release.

In light of the pandemic, private fund managers should analyze their portfolios for potential clawback obligations and plan how to mitigate them if they arise.

The right co-investment strategy helps keep team members motivated, writes the head of executive compensation at Investcorp, Dominic Elias.