PCA Fee Structure: GP vs LP led
Is there a difference in the fee structure between GP and LP led PCA work? Assuming a $1b continuation fund (GP-led) and a $1b LP-led sale are both done by the same firm, which yields higher fees?
Early bump
2-4% for the gp-led. 15-75 bps for the lp-led
lp-led is 0.15-0.75%?? just wanted to clarify that there wasn't a typo
No typo. For a portfolio sale of 1bn you aren't getting above 1%. I know PJT and Evercore are turnings those deals away these days cause the fees are so small compared to GP-led. Jefferies will charge like 75 bps but there are smaller groups that will do it for rock bottom. 10 years ago LP trades would be for around 1% of NAV but now there is fee pressure.
Groups that "broker" tiny 10mm deals might charge 1.5-2% but for something north of 100mm, let alone 1bn it isn't going to clear 75 bps.
Thanks for the color. Looking at the outlook then, do you see firms placing larger emphasis on growing GP-focused staff or will headcount growth be split evenly across deal type? Also interested to know your thoughts on differences in fee generation per head between GP and LP (is there a large difference, or is the staffing larger in GP)
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