I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

See comment below. If you want to share which preqin report you’re talking about (to clarify what you’re looking for), I may be able to point you to some more data, or at least summarize some market observations.

2020 Update: recounting my experiences in PE and sharing thoughts on recent deals at https://leverup.substack.com
 

What specifically are you looking for? Many are set up in a hybrid of PE/HF structures, given the nature of investments (e.g., publicly traded debt that turns into a loan to own, PE-like investments in turnaround companies, esoteric CDS, etc.). Come to think of it, more common to see PE-type structures (with a series of vintage funds) than not, but they’ll have some tweaks that make them more suitable for things you may encounter in distressed investing, like more generous recycling provisions.

2020 Update: recounting my experiences in PE and sharing thoughts on recent deals at https://leverup.substack.com
 

Dude if you want me to join your upstart fund, just lmk. Sounds like you're trying to make a Stellex 2.0, but more software focused?Not sure about your experience but you may need to do a few IS/pledge fund deals off the bat to get some "akshually" attributable track record. From there on out, 2-2.5% / 20% will be marketable - higher management fee to keep the lights on, but probably also greater (close to 100%?) offset against carry. Co-invest rights will be a must with many LPs, but keep in mind that many will not take you up on it (except those who are co-investing purely for fee reasons). You can also set some guardrails around what you'd have to offer. Even the most sophisticated co-investors may not want to do weird debt stuff.In short, if you’re doing lmm turnarounds that are structured like vanilla lmm investments, you’ll probably have vanilla lmm terms. If you need more flexibility to do stuff - like foothold positions in debt, or more esoteric instruments - you should at the very least push for generous recycling. Something to watch out for — if you start to quack too much like a distressed HF, you’ll be bucketed into HF baskets by LPs, which has its own terms and fees dynamics. More fee pressure, different valuation requirements, liquidity, SMAs. None of those would be super fun if you want to do more lmm pe-type work.

EDIT: can’t paragraph on mobile?

2020 Update: recounting my experiences in PE and sharing thoughts on recent deals at https://leverup.substack.com
 

Are you in a place with your legal advisors where you can ask their fund formation group for ideas/market terms? I know (too well) that upstart funds don’t immediately shell out for big law, but perhaps some old contacts from your collective prior lives would be willing to chat. I suspect even the top firms wouldn’t mind starting the convo if you’re raising in the ~100m range for your debut fund, it’d probably generate enough fees for them to have an associate fill an LPA template with the hopes of you “growing into” their services.

The flip side is that that’d probably be more expensive. But if you’re doing weird/fun stuff in your fund, I assume you’re on a first-name basis with some good lawyers.

2020 Update: recounting my experiences in PE and sharing thoughts on recent deals at https://leverup.substack.com
 
Most Helpful

Et voluptas est et odio aspernatur. Repellat nesciunt quibusdam voluptas et quia.

Sit saepe et earum eum. Nemo et et vel iusto aperiam ab sint. Exercitationem consequatur perferendis aut aut illum aut. Doloribus optio neque corporis ut nihil eaque.

2020 Update: recounting my experiences in PE and sharing thoughts on recent deals at https://leverup.substack.com

Career Advancement Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Warburg Pincus 99.0%
  • Blackstone Group 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

March 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

March 2024 Private Equity

  • Principal (9) $653
  • Director/MD (21) $586
  • Vice President (92) $362
  • 3rd+ Year Associate (89) $280
  • 2nd Year Associate (204) $268
  • 1st Year Associate (386) $229
  • 3rd+ Year Analyst (28) $157
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (313) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
kanon's picture
kanon
98.9
6
dosk17's picture
dosk17
98.9
7
GameTheory's picture
GameTheory
98.9
8
CompBanker's picture
CompBanker
98.9
9
DrApeman's picture
DrApeman
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”