Case | HBS Case Collection | June 2008 (Revised February 2013)

Vignettes on Governance of Private Equity Firms

by G. Felda Hardymon, Ann Leamon and Eugenia Adofo

Abstract

In a series of vignettes, Nigella Hardy-Smyth of an international development agency that invests in emerging markets private equity firms must decide how to handle various situations that arise. As a member of the Limited Partner Advisory Board of each of the five firms, she must contend with a fund manager with an indistinct mandate, a manager who wants to exceed the concentration limit in an investment, tension between a star investor and her other partners, a founding partner who wants to fire the rest of his senior team, and a limited partner seeking preferential treatment that might benefit his fund to the detriment of the other limited partners. The process of discussing these helps the class explore the nuanced role of a limited partner in a private equity firm.

Keywords: Private Equity; Investment Funds; Corporate Governance; Governing and Advisory Boards; Managerial Roles; Emerging Markets; Partners and Partnerships;

Citation:

Hardymon, G. Felda, Ann Leamon, and Eugenia Adofo. "Vignettes on Governance of Private Equity Firms." Harvard Business School Case 808-168, June 2008. (Revised February 2013.)