"It'll Be An LP-Friendly World For Awhile:" Q&A With TA Associates
Today TA Associates closed one of the first “LP-friendly” buyout funds to emerge from the credit crunch. The firm raised $4 billion for TA XI, its fund for U.S.-based investors. (The firm has a separate fund for foreign investors.) The fact that it was oversubscribed by $500 million only proves that one nice gesture goes a long way. To refresh your memory, the Boston-based growth investment firm lowered the carried interest on the fund from 25% to 20%, lowered its management fee to an average of 1.74 percent of commitments, agreed to offset management fees with transaction and director fees, and added a no-fault divorce clause. I spoke with Managing Director Brian Conway about the motivation behind the change in terms, the negative IRR of TA’s tenth fund, and the firm’s strategy as a growth investor deploying cash in a not-growing economy.
