Comments on: The 2/20 rule for private equity funds http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/ A vignette into the aberrant thoughts of a private equiteer Sat, 28 Aug 2010 13:18:38 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Carried Interest 2.0 | A Private Equity Blog http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-7221 Carried Interest 2.0 | A Private Equity Blog Tue, 06 Apr 2010 01:01:58 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-7221 [...] business and they’re unlikely to change course at the behest of the LPs who agreed to the 2/20 terms in the first place. It would go against the grain of the private equity methodology to take on a [...] [...] business and they’re unlikely to change course at the behest of the LPs who agreed to the 2/20 terms in the first place. It would go against the grain of the private equity methodology to take on a [...]

]]> By: Recap on textbook private equity posts | A Private Equity Blog http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-7173 Recap on textbook private equity posts | A Private Equity Blog Mon, 15 Feb 2010 00:57:32 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-7173 [...] The 2/20 rule for private equity funds [...] [...] The 2/20 rule for private equity funds [...]

]]> By: the Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-7072 the Private Equiteer Mon, 11 Jan 2010 06:46:15 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-7072 FT published an article asking if it was the end of the 2/20 rule. Upon further investigation I found they were referring to hedge funds. I honestly believe, as per my post, that the 2/20 rule is the lifeblood of the private equity industry. Consequently, I can't see PE working without it. Of course operations would still continue, but the without the best people, it just would be what it is today, in my opinion. FT published an article asking if it was the end of the 2/20 rule. Upon further investigation I found they were referring to hedge funds. I honestly believe, as per my post, that the 2/20 rule is the lifeblood of the private equity industry. Consequently, I can't see PE working without it. Of course operations would still continue, but the without the best people, it just would be what it is today, in my opinion.

]]> By: DevelopmentCorporate » Blog Archive » What the Proposed Carried Interest Tax Means for Private Equity Portfolio Companies http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-7002 DevelopmentCorporate » Blog Archive » What the Proposed Carried Interest Tax Means for Private Equity Portfolio Companies Fri, 08 Jan 2010 07:33:04 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-7002 [...] and then claim 20% of the profits (aka carried interest) when the investment is sold (the infamous 2 and 20 rule).  Historically, carried interest has been taxed as a capital gain in the United States since the [...] [...] and then claim 20% of the profits (aka carried interest) when the investment is sold (the infamous 2 and 20 rule).  Historically, carried interest has been taxed as a capital gain in the United States since the [...]

]]> By: The Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-4864 The Private Equiteer Wed, 21 Oct 2009 09:20:37 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-4864 Hey Vinay. Yes, fees are calculated on the entire $1b. But if you sell one your investees and return the capital + profits to investors, then fees are not calculated on that amount. So, let's say you used $200m for that investment you just exited, then fees only apply to $800m. Hey Vinay. Yes, fees are calculated on the entire $1b. But if you sell one your investees and return the capital + profits to investors, then fees are not calculated on that amount. So, let’s say you used $200m for that investment you just exited, then fees only apply to $800m.

]]> By: Vinay http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-4863 Vinay Wed, 21 Oct 2009 08:41:00 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-4863 When you say "only invested or uncalled capital attracts fees", what exactly does that mean? Say $1bn fund with $400mn already invested and $600mn of fire power still there. Will the fees be calculated on $1bn or $600mn? Regards, Vinay When you say “only invested or uncalled capital attracts fees”, what exactly does that mean? Say $1bn fund with $400mn already invested and $600mn of fire power still there. Will the fees be calculated on $1bn or $600mn?

Regards,
Vinay

]]> By: Capital calls: who’s really in control? | The Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-81 Capital calls: who’s really in control? | The Private Equiteer Fri, 13 Mar 2009 13:56:30 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-81 [...] what they’re always concerned about… the carry.  I’ve written about the 2/20 rule and the significance of carry [...] [...] what they’re always concerned about… the carry.  I’ve written about the 2/20 rule and the significance of carry [...]

]]> By: Bred in capitivity… and looking to escape | The Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-70 Bred in capitivity… and looking to escape | The Private Equiteer Thu, 05 Mar 2009 08:03:55 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-70 [...] I’ve written previously about how private equity teams are precious about their carry and how various external parties can have a stake in the carry. Well, it’s not unusual for [...] [...] I’ve written previously about how private equity teams are precious about their carry and how various external parties can have a stake in the carry. Well, it’s not unusual for [...]

]]> By: Show me the carry… or at least most of it | The Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-68 Show me the carry… or at least most of it | The Private Equiteer Thu, 05 Mar 2009 08:01:56 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-68 [...] a previous post I talked about the fee structure of the typical private equity fund and in particular the 20% [...] [...] a previous post I talked about the fee structure of the typical private equity fund and in particular the 20% [...]

]]> By: Structure of a private equity fund | The Private Equiteer http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-64 Structure of a private equity fund | The Private Equiteer Thu, 05 Mar 2009 07:58:01 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-64 [...] refer to a direct investment of the fund, but it mostly refers to the right to carried interest. This article talks about “carry” in more detail. The partnership deed outlines the terms such as [...] [...] refer to a direct investment of the fund, but it mostly refers to the right to carried interest. This article talks about “carry” in more detail. The partnership deed outlines the terms such as [...]

]]> By: Bred in capitivity… and looking to escape at Mea Sententia http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-55 Bred in capitivity… and looking to escape at Mea Sententia Thu, 26 Feb 2009 00:02:56 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-55 [...] I’ve written previously about how private equity teams are precious about their carry and how various external parties can have a stake in the carry. Well, it’s not unusual for [...] [...] I’ve written previously about how private equity teams are precious about their carry and how various external parties can have a stake in the carry. Well, it’s not unusual for [...]

]]> By: Show me the carry… or at least most of it at Mea Sententia http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-51 Show me the carry… or at least most of it at Mea Sententia Wed, 25 Feb 2009 12:28:58 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-51 [...] a previous post I talked about the fee structure of the typical private equity fund and in particular the 20% [...] [...] a previous post I talked about the fee structure of the typical private equity fund and in particular the 20% [...]

]]> By: Structure of a private equity fund at Mea Sententia http://www.theprivateequiteer.com/the-220-rule-for-private-equity-funds/comment-page-1/#comment-49 Structure of a private equity fund at Mea Sententia Wed, 25 Feb 2009 12:25:02 +0000 http://theprivateequiteer.wordpress.com/?p=111#comment-49 [...] refer to a direct investment of the fund, but it mostly refers to the right to carried interest. This article talks about “carry” in more detail. The partnership deed outlines the terms such as [...] [...] refer to a direct investment of the fund, but it mostly refers to the right to carried interest. This article talks about “carry” in more detail. The partnership deed outlines the terms such as [...]

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