Why investors love your GP commitment

Academic assessment of 'skin in the game,' cyber-risk consultants and our five most read this year.

It seems obvious that your investors want to see partners’ personal wealth tied up with their capital. It’s one of the reasons the private equity model works; we win together, we lose together. Now some business school researchers in Norway have investigated how the GP commitment affects investment behavior and, sure enough, the more skin in the game, the lower risk the acquisition targets (but the more leverage gets used). “The GP selects the company by trading off the expected cashflow against the downside risk,” say the researchers.

Elsewhere around the site, we have updated our cybersecurity consultants directory, adding details on RFA. Don’t forget you can see all our directories in one place here.

Finally, because it is Friday and peak vacation season, here are five of our most read stories from the first half of the year:

How robots are changing private equity forever

Nine takeaways from ILPA Principle 3.0

TIMELINE: What Abraaj did, according to the SEC

Proportion of GPs charging more than 2% management fee doubles

How to select a waterfall model

Email prepared by Toby Mitchenall.