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FEE VALIDATION AND BENCHMARKING IN PRIVATE MARKET FUNDS

Fund data transparency doesn’t equal fund fee accuracy. In this Q&A Alex Tarantino, Managing Director, Head of eFront Sales discusses why LPs also need continuous fee oversight to safeguard their negotiated terms.

Over the past decade, private markets have made meaningful progress toward transparency. Improved reporting standards and more consistent data disclosure have helped Limited Partners (LPs) become better informed about the funds they invest in. At the same time, fundraising headwinds have shifted negotiating power, with General Partners (GPs) increasingly making concessions on fees and terms to meet their targets—an encouraging trend, as noted in Preqin’s most recent Investor Survey. But even as institutional investors begin to benefit from more favorable fund terms, and better disclosure of fee data in the ongoing reporting, a fundamental challenge remains: more data doesn’t always lead to increased confidence and clarity in fund charges. LPs continue to grapple with fee structures that have grown more complex, more nuanced, and, in many cases, harder to decode—making true fee validation more important than ever. LPs continue to grapple with fee structures that have grown more complex, more nuanced, and, in many cases, harder to decode—making true fee validation more important than ever.

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