All About Private Equity Management Fees and Expenses

This seminar will help private equity (PE) fund managers on the disclosure issues and conflicts of interest associated with fund fees and expense allocations. We’ll discuss best practices in administration and reporting that will help you with investors’ due diligence.

Findings from examinations of PE advisers revealed that the most common deficiencies were related to fees and expenses charged by managers of portfolio companies. Specific deficiencies included payments to consultants, shifting expenses during the fund’s life, allocation of expenses and hidden fees.

Global regulators continue to focus on fees, expenses and conflicts of interest inherent in the PE manager role. Fund managers who fail to properly disclose fees, expenses and conflicts of interest to their investors not only fail to get funded, they are subject to substantial fines and disciplinary actions. We’ll discuss case studies designed to provide guidance to fund managers regarding practices to avoid, and best practices for full disclosure.

In reviewing current or prospective fund investments, your prospective investors will question you about fee and expense allocations. Funds that do not satisfy investor questions or concerns face the risk of enforcement activity and potential investor litigation.

Mr. Peterman will discuss fund fee and expense allocation deficiencies and the specific practices identified as problematic. He will also discuss best practices for reporting fees and expenses and due diligence for investors evaluating current and prospective investments.

Detailed Information

  • Payments to consultants
  • Shifting expenses during fund’s life
  • Characterization of expenses
  • Hidden fees
  • Investor due diligence
  • Best practices in formulating and disclosing PE management fees and expenses
  • What are regulatory priorities in examining fund manager’s fees and expenses?
  • What particular fee and expense practices are identified as deficient with respect to disclosure to investors?
  • What due diligence steps should investors take in light of regulatory audit findings?
  • What steps should funds take to review fee and expense practices to ensure investor confidence?