12 Jul 2022
Paid In Full: Understand Your Investment Team’s Compensation
The private fund industry continues to grow at a record pace, with $9.2 trillion under management as of March 2021. As the industry has grown, private fund principals and employees have become increasingly well compensated through a variety of sources, including salary, bonus, long-term incentive plan (LTIP) compensation, fund co-investment participation, and carried interest awards. To retain and recruit talented individuals, private fund sponsors are well served by ensuring their team members are appropriately compensated. Likewise, as the marketplace has become ever more competitive for top talent, private fund sponsors must consider appropriate conditions and restrictions to protect their interests in connection with departures. This two-part series addresses the legal aspects of private investment fund compensation arrangements for their investment teams.
Related Content
- Private Investment Fund Team Compensation Arrangements: Continuity Considerations
Check out the second part of this two-part series addressing legal and economic consequences for private investment fund compensation arrangements when a member of an investment team departs.
- Management Agreement for a Private Equity Fund
Consult this management agreement template to ensure that the members of your investment team receive appropriate fees from the fund(s) they advise. - Management Incentive Equity in Private Equity Transactions
Read how your investment team isn’t the only group of individuals getting paid—incentive equity, if structured correctly, can ensure that your portfolio company management team’s interests are aligned with those of the sponsor’s investment team.
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