The next generation

The succession issue has raised its head again of late, as teams consider hitting the
fundraising roadshow. With senior partners reaching retirement age, the younger
generations are being left behind to deal with the aftermath of the credit crunch,
something that does not sit well with investors. With the downturn having ravaged the
expected returns for a number of funds, the performance-led remuneration prospects of
junior partners in some cases look distant. For these individuals, the prospect of getting
rewards even close to that of the seniors looks slim.

LPs, meanwhile, are aware of the importance of incentivisation and issues such as a
generational gap could begin to affect fund performance. LPs are now placing this point
at the forefront of expectations and insist junior members are correctly incentivised. The

next generation will be the key to the survival of firms and in a broader sense the asset class as a whole. Private equity firms are going to have to up their game if they are to stand any chance of securing new funds and retaining top young talent, otherwise we could see an exodus of promising investment executives following the money elsewhere.

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• Topics
• France
• LPs
• Funds