Report on Trends in Key PE Fund Terms Reveals Latest Push‑Pull of Negotiating Dynamics Between LPs and GPs

The fray of negotiations can be a bit limiting as GPs and LPs jostle for positioning while moving from opposite ends of the spectrum on several points. It is helpful instead to step back from the volatility of negotiations to evaluate both where terms ultimately settle, as well as how agreed terms have shifted over time across a number of situations. That approach allows a more nuanced perspective to shine through, revealing areas where both LPs and GPs are successfully making headway, as well as where compromises are occurring. To that end, MJ Hudson recently released its annual PE fund terms research (Report), which highlights key economic and non-economic terms across a significant sample of PE, venture capital, turnaround and growth funds that either came to market or closed in 2021. The Report aims to help LPs and GPs better understand the current strengths and weaknesses of the fundamental terms affecting PE funds. This article summarizes the key takeaways from the Report, along with supplemental analysis from one of its authors, MJ Hudson partner Robert Eke. See our two-part coverage of a previous MJ Hudson report: “Increased LP Power in Key PE Terms Marking Alignment of Interests” (Sep. 28, 2021); and “Trends in Negotiated Terms Relating to PE Fund Governance” (Oct. 5, 2021).

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