The Evolving Relationship Between LP & GPs
Author:
MIF/FOMIN
Sept. 2012
Overview
Relationships between limited partners and general partners in the private equity industry have changed more over the past five years than over the prior 50—which is roughly the age of the industry. These changes have been driven by a number of forces: the unprecedented run-up in the sizes and activities of private equity funds to 2007; the subsequent crash and the unexpected liquidity pressures suffered by some of the LPs of longest standing; the persistent underperformance (relative to public markets and expectations) suffered by venture capital funds since the NASDAQ crash; and the decisions of some major buyout funds to go public, among them. Such developments have influenced the nature of the industry in ways that are still evolving and still being understood.