Boosting your PE IRR- by using subscription lines -is it a good idea?
August 1st, 2017 Private Equity often charges say 1.5% per annum management fees and 20 percent carry, usually over say an 8% preferred return to Investors. The annual management fee is generally calculated on committed capital ie when an LP (investor or “Limited Partner”) subscribes to a fund, the General Partner (“GP”) (the PE group) can usually ask for money any time they like for up to 5 or 6 years from the first close date. Eliminate or reduce the management fee IRR drag
