Quite a few mega-firms engaged in goodwill actions with LPs over the course of 2009.
TPG, Permira, Apax and Sun Capital Partners were among the fund managers that offered limited partners the chance to cut back on their commitments to previously closed funds, providing a lifeline to investors with liquidity or over-exposure issues.
It also planned to return $20 million in fees to LPs in its sixth global buyout fund. “We took this proactive step in order to share the economic cost of a deal market that has been slower than anyone anticipated,” James Coulter, TPG co-founder, said during its recent annual investors' meeting.
Slowed deal pace was also the rationale behind the return of fees and or carry by fellow mega-firms Permira and Terra Firma.
Terra Firma told LPs it would return carried interest accrued since 2004, a sum amounting to around €80 million. “Our investors have suffered and therefore our rewards should suffer at the same time. Such longer-term rewards throughout the entire financial system would have led to a very different world to the one we find ourselves in today,” Guy Hands, Terra Firma's founder and chairman, said in the firm's annual review.
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