Revenue Model: “2 & 20”
Private equity fund managers earn:
- 2% Management Fee: Covers operational costs.
- 20% Performance Fee: A share of profits exceeding investor hurdle rates.
Types of Private Equity Funds
- ‘En Commandite Partnership’: Investors as LPs with minimal involvement; GPs handle investments.
- Private Companies: Structured around contracts between investors and managers.
Benefits of Private Equity
- Provides both capital and strategic expertise.
- Drives growth through robust governance and oversight.
