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The evolution of partnership terms – Aligning GP and LP interests

A number of recent developments in private equity terms and conditions have shifted the balance of power towards limited partners, says Robert Hellman of MDC Partners in an article for the Institute of Fiduciary Education.

The article discusses clawback provisions, key man clauses, and the importance of a healthy information flow between GPs and LPs. It also addresses the controversial subjects of fees, reductions in fund size and GP contributions.

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MDC Partners was founded in 1984 to buy and build middle-market companies in partnership with management. The firm has around $1.2bn of capital under management and has invested in 34 platform acquisitions representing almost $2.5bn in total transaction value.