Open-Ended Relationships

Thomas Meyer
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Thomas Meyer: LDS Partners

Chapter Chapter 20 in Private Equity Unchained, 2014, pp 213-224 from Palgrave Macmillan

Abstract: Abstract Nature’s solution for bridging longer distances in the fitness landscape is — sex. Without stretching this analogy too far, engaging in a relationship between strong parents can increase the offspring’s chances in the future significantly. During the lifetime of a fund, the interests of the GPs and the LPs are so closely aligned that the fund can be seen as an entity combining to some degree positive and negative characteristics, i.e., the ‘genetic code’, of fund managers and their investors. For the institutional investor, searching for suitable funds requires significant effort, and due diligence, structuring, and subsequent monitoring are quite expensive. The ‘pairing’ between LPs and GPs usually goes beyond the actual fund, with the ‘genetic code’ defining the relationship being passed on to follow-on funds.

Keywords: Institutional Investor; Private Equity; Fund Manager; Asset Class; Investment Horizon (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-28682-6_20

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DOI: 10.1057/9781137286826_20

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