Astorg is offering anchor limited partners in its ninth fund a 12% preferred return, a rare move in private equity fundraising.
The elevated hurdle rate is being read in two ways. Some observers see it as a clear show of alignment between the firm and its investors, since returns are only shared after a higher threshold is met. Others view it as a sign that Astorg is working harder to attract capital in a challenging fundraising market.
The question for limited partners is whether the richer protection is worth the commitment. A higher preferred return means the general partner must deliver stronger performance before carried interest kicks in, which can reassure investors who worry about paying fees on mediocre results.
Whether the structure becomes a template for other managers will depend on how the fund performs and how the terms are received across the market.
Source: PE International · Summarized by HeadlinesBriefing