Silver Lake to reduce fees for fund IV

According to a marketing document cited by Bloomberg, the management fee for Silver Lake Partners IV will be as high as 1.5% for investments of less than $250 million and as low as 1.375% for those that commit at least $500 million. The carry rate will remain at the industry standard of 20%.

The fund's target is $7.5 billion, and US-based Silver Lake counts the California Public Employees' Retirement System and the Washington State Investment Board among its existing backers.

Fund IV is a successor vehicle to Silver Lake's third fund, which charged all LPs a management fee of 1.5%. That fund had the same initial target as fund IV, but ended up amassing around $9.4 billion in commitments by 2007. It invested more than $1.2 billion across six businesses last year, including a $328 million cash injection for Chinese internet player Alibaba Group.

Fund managers on this side of the globe seem to have excused themselves from the fees debate which continues to rage in the US and Europe. The main reason is that nascent Asian GPs often lack the human infrastructure required to properly implement investment strategies. LPs therefore understand that local GPs need to charge sufficient fees to build up their infrastructure and pay salaries.

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• Topics
• Buyout
• Fundraising
• Fundraising
• Silver Lake
• USA