Europe, Middle East and Africa: all change

Author: Olly Jackson | Published: 28 Aug 2018
Time for reform

Private equity fee models are changing as the industry consolidates and favours mega funds. It's envisaged that there will be even greater fee flexibility to mitigate risk and encourage investment. The two and 20 model – a two percent management fee and a 20% performance fee based on returns – is being slowly phased out with many firms charging a performance fee as low as 15% for riskier markets. Consolidation in the sector has also influenced this change. M&A activity in private equity last year was more than double the levels seen in 2015, according to a Triago report. This means firms can raise even bigger funds with a more performance based structure.

Eyes on the prize Increasing public desire to protect national interests is encouraging US and EU governments...