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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
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Who Are We?
Three insiders. One mic. All things private equity — explained. Hi 👋 We’re Ed, Rory, and Emily — a CEO, a CFO, and a Chief of Staff — here to demystify the world of private equity. Between us, we’ve sat in the founder’s chair, run PE‑backed companies, and worked on the deal side, so we know the wins, the pitfalls, and the jargon (and we’ll explain it).
Through the Private Equity Experience Podcast, our book On‑Ramp to Exit, and a library of free tools and templates, we share real‑world stories, practical strategies, and insider insights to help you navigate every stage of the PE journey — whether you’re leading a portfolio company, joining a deal team, considering PE, or just PE‑curious.
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...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)
20 episodes
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