The Ledger
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Nelson: Aggressive GP subscription line usage poses material risk in crisis
“There are a whole host of GPs and funds that have been much more aggressive with sublines in terms of size. In terms of duration and in terms of usage. And so there are a material number of cases where those sublines really should be front and center as part o…”
Nelson: PE Cannot Claim Superior Governance While Shunning ESG/DEI Responsibility
“Private equity can't
Continue to claim to represent a superior governance model for investing where that greater degree of control and influence leads to outside returns.
And in the same breath,
Say that we're unable to affect change as it relates to diversity…”
ILPA's Nelson: Private equity playing field has long favored GPs in negotiations
“I think for a number of years now, the playing field has been tilted for a whole host of reasons, and it's been difficult for LPs in terms of terms negotiations, frankly, in some of the core aspects of the LP-GP relation.”
Nelson: Many LPs entered the COVID crisis at target PE allocations
“A lot of organizations came into this current period, either, either at or very close to their desired allocations within private equity. And I think that makes the situation a little bit different than what we saw with the global financial crisis.”
ILPA: LPs Favor Monthly Over Biweekly GP Crisis Updates
“What we heard from our LP members last week is that monthly is probably a reasonable expectation. I mean, as long as there is the opportunity to have conversations in the interim. We talked about the notion of biweekly that felt to most involved to be too much…”
Steve Nelson: Private equity alignment of interest must happen now or never
“I think in terms of governance, in terms of transparency, in terms of reporting, that whole notion of alignment of interest, if it's not going to happen now, it's never going to happen. It matters more than ever.”
ILPA's Nelson: LPs must prioritize high-impact governance terms over exhaustive negotiations
“Many LPs have taken is to be targeted in terms of what they care about and really go to their GPs with as strong a message as possible on fiduciary duty or reporting or LPAC rights and try and make sure that what they're asking for is what they see as being mo…”
ILPA: Capital Call Pace Had Not Shifted Dramatically in Early Crisis
“We just gathered about 500 folks for a town hall conversation late last week and asked that question. And the early read is that halls haven't changed dramatically in the short term, but folks are expecting to see some of that.”
Nelson: Allocator interest in distressed credit and secondaries will grow
“So the stress credit opportunity funds, secondaries down the line, I think that there's budding interest going to be growing interest. In those areas as we go forward, but relative impact and weight within member portfolios, traditional buyouts is where the fo…”