Side Letter: ILPA on GP clawback, $2.5trn powder keg, Abraaj latest

ILPA's latest how-to guide for LPs, private markets' $2.5 trillion piggy-bank, "political interests" behind Naqvi accusations. Here’s today's brief, for our valued subscribers only.

Just happened

Hot off the press

ILPA’s Principles 3.0 has just this minute been released, and at 44 pages, it’s bigger than ever. The document – years in the making – addresses new and emerging topics, like GP-led secondaries and subscription credit lines. “It’s meant to be a resource, and hopefully will establish a better starting point for a lot of these issues that relate to the alignment in the partnership,” the limited partners group’s Jennifer Choi (pictured) tells us. One thing GPs probably won’t take kindly to? The recommendations around clawback models.

Dry powder (keg?)

The level of unspent cash has risen to its highest level since the lead-up to the global financial crisis, the FT is reporting (paywall). With almost $2.5 trillion in dry powder across private markets strategies, buyout firms are becoming more aggressive in their deals due to increased competition and high pricing. Cause for concern? Maybe, maybe not. As a partner at a London-headquartered buyout shop told us: “It annoys me when people say prices are high. If something’s too expensive, just don’t buy it.”

Abraaj latest

Abraaj Group founder Arif Naqvi and five other senior executives stand accused of misappropriating hundreds of millions of dollars, money laundering and bribing Pakistani officials. The accusations are all part of a US plot, according to Naqvi’s lawyer. Speaking yesterday at London’s Westminster Magistrates’ Court, Hugo Keith QC said the case was brought out of “political interests” due to the threat Naqvi and Abraaj posed to US interests. The trial is set for 3 February.


Invest Europe QA takeaways. We recently caught up with new Invest Europe chairman Thierry Baudon who is unsurprisingly bullish on the PE industry’s ability to thwart political headwinds in Europe. The European Parliament may contain fewer PE allies than before, but there is common ground to be found.

Rhode Island’s richest. Forbes has published its Richest Person in Every US State list and there’s one private equity professional: Providence Equity Partners founder and chief exec Jonathan Nelson. The Rhode Island native has a net worth of $1.8 billion and was given a “self-made” score of 8, meaning his path to riches was largely his own doing. It’s clear selling books online is more lucrative than private equity, as Nelson’s net worth pales in comparison with Jeff Bezos, who tops the list at $157 billion.

Dig deeper

Ply-nty of commitments. Plymouth County Retirement System has committed to three North American private equity funds. Below are some details of recent commitments made by the $1 billion retirement fund. For more information on PCRS as well as more than 6,700 other institutions, check out the PEI database.

They said it

“Yes, they will apply some pressure to push regulations that would support their beliefs. If they do it in a sensible way, it is a win-win.”

Invest Europe chairman Thierry Baudon tells PEI increased Greens representation in the EU Parliament doesn’t pose a threat to the PE industry.

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Today’s letter was prepared by Isobel MarkhamAdam Le and Rod James.

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