Private equity The fees were nice while they lasted. The days when private equity funds could sit on dry powder, collecting 1.5 to 2 per cent management fees on colossal funds are over. In the past 24 hours, three leading European private equity houses – Candover, PAI and Apax – have taken radical steps that will allow their investors to wriggle out of commitments to fund new investments. The terms on which they have done so are revealing.
Candover, onetime gold standard of European private equity, plans to release investors from commitments to its €3bn 2008 fund, barely 10 per cent invested in oil services firm Expro. This will spare it from stumping up the €1bn it itself committed and cannot afford. The restructuring leaves it supporting a shrunken stable of 15 deal-makers with fee income - and any carry - generated from its 2005 and 2001 funds. More fundamentally, it has no capital to invest and faces an existential crisis.
