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George Roberts will be manning a KKR booth at a Schwab sales event in Chicago next week as the...

George Roberts will be manning a KKR booth at a Schwab sales event in Chicago next week as the once-swashbuckling P-E giant moves to become just another asset manager, launching two investment funds to be marketed to retail by Schwab. "It's all about fees and asset size now," says an industry lawyer, rather than growing carried interest - the 20% profit cut P-E firms earn when selling portfolio companies.
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  • Cash Flow is King
    , contributor
    Comments (11) | Send Message
     
    Do these mega PE firm business models work when you, on a pro forma basis, take the current cost structure and factor in the fact that the management fees and carried interest fees on new fund raises are collapsing at an alarming rate? Compare the management fees and carried interest (not to mention $ size) on the 2006 fund vs. the 2012 fund! Raising retail money (with $2,500.00 minimum account balances in the high yield fund and $25,000.00 in the distressed/special situations fund) seems like a real distraction (resources, management, etc.) or an ill advised way to maintain / grow headline AUM numbers.
    12 Nov 2012, 05:13 PM Reply Like
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