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Private equity firms are offering incentives such as fee discounts and co-investment opportunities to attract investors in a challenging fundraising environment. Firms like CVC Capital Partners, Ardian, TPG, and Cinven are trying to secure backing from deep-pocketed investors by offering favorable terms, including larger amounts of co-investment and even a share of management fees.
The tough fundraising market has shifted power towards investors, allowing them to negotiate better terms. Some tactics being employed by firms include offering fee discounts to large investors, providing management fee holidays, and giving access to co-investment opportunities. These incentives aim to boost overall returns for investors and address concerns about the impact of rising interest rates on private equity performance. However, the industry's fee model and overall headline fees have seen little change despite these inducements.
