Why does this matter? Because much of the money that is given to venture capital firms who in turn, invest it in technology start-ups is provided by foundations, endowments, pension funds and other institutional investors. These so called “sophisticated” investors have a duty to invest wisely on behalf of their beneficiaries whether that is to provide for pensions or achieve some charitable goal. When these two investors, who collectively have over $50 billion currently invested in private equity across hundreds of managers, don’t know how much they have been paying in carried interest and other fees over a period of some 25 years is both shocking and I would argue almost a dereliction of duty.
By Ashok Parekh, Director of Investment Services