Building the Venture Network - Investment Community | Associate Partner at NB&A Investment Company | Raising Capital Globally | Talk to me about art, science, business, and philosophy
Bridger Pennington explains the structure of Private Equity funds, brilliantly! According to him, the process should not be complicated! Here are the major moving parts: ✅ General Partner (GP): The one who manages the fund and directs the capital investments. You are responsible for making all strategic decisions. ✅ Limited Partners (LPs): These are your investors. They provide the capital but have limited liability and minimal decision-making power. ✅ Management Fees: New fund managers should avoid high management fees. Instead, focus on building trust and results before charging the typical 2%. ✅ Preferred Return (Pref): Set an 8% pref, ensuring your investors receive the first share of returns before the GP profits. ✅ Catch-Up: After the pref, you can allocate a small catch-up fee (e.g., 2%) to compensate yourself for managing the fund. ✅ Carried Interest (80/20 Split): Any returns above 10% are typically split 80% to LPs and 20% to the GP. This is where fund managers can maximize their earnings. ✅ Long-Term Strategy: Most PE funds operate with a 10-year lockup period, where businesses are acquired, scaled, and eventually sold to generate returns for investors. Bridger’s approach focuses on aligning interests between fund managers and investors while providing opportunities to maximize profits. 💡 Want to connect with other ambitious Private Equity fund managers and grow your network? Apply to join our Venture Network community today: https://lnkd.in/dPJxu2w4 #PrivateEquity #Funding #Investments #Innovation
William Naranjo
2mo
💯
Building the Venture Network - Investment Community | Associate Partner at NB&A Investment Company | Raising Capital Globally | Talk to me about art, science, business, and philosophy
2mo#funds #PE