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Alignment of Interest
Amid today’s environment and ongoing growth in GP-led deals, rolling carry and putting additional capital at risk are no longer enough to guarantee alignment, says Morgan Stanley Investment Management’s Nash Waterman.
Some of Flexstone’s clients are expected to raise their Asia-Pacific allocations from 10% to 15-20%, Eric Deram, managing partner at Flexstone Partners, told PEI.
Staying aligned with clients and seeking GPs who focus on real value creation keep private wealth investors hungry for PE.
A disconnect exists between GPs and LPs on the use of financing tools such as NAV loans and continuation funds.
The state-backed investor is doubling down on GP due diligence as fundraising timelines lengthen, its CIO for private and strategic investments tells PEI.
As some GPs attempt to codify the removal of LPAC review and consent for continuation vehicles, they will face a ream of objections among investors.
As an increasing number of sponsors turn to secondaries processes, doubts are being raised about the market’s building blocks. Just how aligned is the secondaries market today?
Conflicts of interest can arise within the LP base as LPACs act in their own interest, not in the interest of the fund.
For the GP, internal alignment is another opportunity to manage team dynamics. Third parties will want to see that the right people participate in the economics.
When dealing with waterfalls, there are tools that can be used to create economic alignment from the outset.