Hurdle rates: going, going, gone?

“Hurdle rates” or “preferred return” is the rate of return that a private fund guarantees to deliver to its investors before the manager becomes entitled to share in the fund’s profits via its carried interest. Historically set at 8% compounded annually, it has been a standard feature of private fund economics since the industry’s earliest…

LP intel

The disappearing hurdle: Illusion or reality? LP Intel – May 2017 The ‘hurdle’ rate refers to the amount investors in private funds will receive as a minimum return after receipt of their drawn commitments, typically set at 8%, before the fund manager can participate in its share of profits as carried interest. In recent times,…