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Understanding Private Equity Management Fees in a Changing Market
Manage episode 454719027 series 3613980
In this episode, hosts Ed Barton, Rory Liebhart, and Emily Sander dive into the world of management fees in private equity. They discuss how PE firms make money, what founders and management teams need to know, and the importance of understanding management fees in deal negotiations.
Key Takeaways:
- Management fees are a crucial aspect of private equity investing, and understanding them is essential for founders and management teams.
- PE firms use various fee structures, including management fees, carried interest, and carried capital.
- Management fees can be a significant source of revenue for PE firms, but they can also be a major source of stress for founders and management teams.
- Understanding management fees is critical for navigating deal negotiations and ensuring a successful exit.
Actionable Tips:
- Founders and management teams should understand the management fee structure used by their PE firm.
- PE firms should be transparent about their management fee structures to ensure a smooth deal negotiation process.
- Understanding management fees is essential for navigating the complexities of private equity investing.
Timestamps:
00:34 Diving into Management Fees
02:56 Impact of COVID on Private Equity Funds
10:22 Current Market Challenges and Strategies
24:05 Navigating PE Firm Funding Challenges
25:48 Understanding Carry and Management Fees
29:36 Strategic Advice for PE Firms
34:35 Impact of Debt and Interest Rates
Who We Are
If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.
Chapters
1. Understanding Private Equity Management Fees in a Changing Market (00:00:00)
2. Diving into Management Fees (00:00:34)
3. Impact of COVID on Private Equity Funds (00:02:56)
4. Current Market Challenges and Strategies (00:10:22)
5. Navigating PE Firm Funding Challenges (00:24:05)
6. Understanding Carry and Management Fees (00:25:48)
7. Strategic Advice for PE Firms (00:29:36)
8. Impact of Debt and Interest Rates (00:34:35)
12 episodes
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