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Private Equity Management Liability: Research report 2004/2005

As recently as five years ago, management liability was a minor consideration for the private equity community, says Marsh. This relatively relaxed view of professional risk was complemented by the golden years of private equity, where stellar returns and strong performance were commonplace and reference to corporate governance and regulation were not yet prominent in the private equity vernacular. Now private equity - across all fund sizes and geographies - are adopting a much more active approach to the management of their professional liabilities.

This is a result of funds finding themselves increasingly under scrutiny, not just by their investors but also by management teams, partners and regulators.

Today's environment appears fraught with more challenges than ever, as the industry and its performance become more visible to a wider audience.

It is against this backdrop that Marsh commissioned research into the perception of private equity management liability. In the most comprehensive report of its kind, we have interviewed private equity CEOs, CFOs and investment directors, as well as the insurers who underwrite the risks.

Marsh's Private Equity Management Liability Research provides an insight into the risks and liabilities affecting the private equity business. They asked private equity practitioners for their perceptions of the risks associated with fundraising, investing, managing portfolios and investee companies, and exiting deals. It also looks into their expectations of future developments and trends. A second survey gauges the current opinions of insurers on private equity firms and individual insurance issues.

Remark, mergermarket's market research subsidiary, surveyed 100 private equity professionals at nationwide firms based in the UK, Germany, France, Spain and the Nordic countries, as well as at global investment firms. Respondents were drawn from the managing partner, finance and investment director levels.

Click here to view the summary of the report's findings (pdf 272kb)

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