Private Equity International interview: Answering LPs’ transparency needs

Last September, Melbourne-based institutional fund manager IFM Investors made an unusual announcement. The firm, with A$127 billion ($89 billion; €79 billion) of funds under management (including A$1.8 billion in private equity, including direct investments in the Australian mid-market), declared a 7.5 percent fee rebate to its 370 clients.

Pension funds are looking for more scale opportunities and direct access to midmarket companies and not necessarily sub-scale diversified investments through blind-pool funds. They are willing to take a much longer term view than traditional private equity funds.

Stuart Wardman-Browne, Global Head of Private Equity

IFM, which issued its first fee rebate in 2011, challenged other managers to follow suit. Such a move is rare in the world of funds management, in particular, where there has been little deviation from the traditional fee structure. We asked IFM investors’ global head of private equity Stuart Wardman-Browne and IFM investors private equity executive directors Adrian Kerley and David Odgers what it signals about the changing nature of the LP-GP relationship.