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  • 2020
  • Working Paper
  • HBS Working Paper Series

How Do Private Equity Fees Vary Across Public Pensions?

By: Juliane Begenau and Emil Siriwardane
  • Format:Print
  • | Language:English
  • | Pages:68
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Abstract

We study how investment fees vary within private-capital funds. Net-of-fee return clustering suggests that most funds have two tiers of fees, and we decompose differences across tiers into both management and performance-based fees. Managers of venture capital funds and those in high demand are less likely to use multiple fee schedules. Some investors consistently pay lower fees relative to others within their funds. Investor size, experience, and past performance explain some but not all of this effect, suggesting that unobserved traits like negotiation skill or bargaining power materially impact the fees that investors pay to access private markets.

Keywords

Pension Funds; Fee Dispersion; Search And Negotiation Frictions; Private Equity; Investment Funds

Citation

Begenau, Juliane, and Emil Siriwardane. "How Do Private Equity Fees Vary Across Public Pensions?" Harvard Business School Working Paper, No. 20-073, January 2020. (This working paper has been subsumed by the published paper "Fee Variation in Private Equity." Please see the final version of this paper under "Journal Articles.")
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About The Author

Emil N. Siriwardane

Finance
→More Publications

Related Work

    • Forthcoming
    • Journal of Finance

    Fee Variation in Private Equity

    By: Juliane Begenau and Emil N. Siriwardane
Related Work
  • Fee Variation in Private Equity By: Juliane Begenau and Emil N. Siriwardane
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