One finding of the study was that 69% of LPs would consider not investing in a fund if it did not conform to the ILPA Principles.
“In the difficult fundraising market, negotiating favorable fund terms and conditions are of the upmost importance to investors. That such a large proportion of LPs will not consider investing in a fund that does not conform to the ILPA principles is clear evidence of this,” said Helen Kenyon of Preqin.
Another finding was that 61% of investors stated that they would be willing to pay higher fees for access to fund managers that they perceive to have the best track records.
“LPs are not necessarily demanding a specific management fee level; what is far more important is that the fees make sense in the context of the management of the fund. Our recent conversations with LPs have revealed that many will consider paying higher fees if this can be justified by higher performance, and if higher management fees are necessary to operate a superior firm effectively then many investors will see this as a price worth paying,” said Ms. Kenyon.