Bain Capital Reportedly Offering Options on Fund Econcomics: Reuters

As an investor in private equity funds, fund terms are of keen interest to me.  Carried interest (profit share) and management fee are cornerstones of the economic agreement between the general partner and the limited partners in a fund.  According to a Reuters story, Bain Capital is reportedly raising a new global buyout fund and offering investors options on the economics.  Apparently, in a prior Asian fund, Bain offered investors two fee options: (1) a 2% management fee with 20% carried interest after a 7% hurdle rate, or (2) a 1% management fee with 30% carried interest after a 10% hurdle rate.  I applaud Bain for offering investors options on fund economics, as it shows an understanding that different LPs view economics differently.

Also of interest is that Bain itself is committing a large portion of the fund, showing "skin in the game" and aligning their interests with their investors.  According the the Reuters story, Bain employees committed about 15% of the capital of the prior Asia fund.  I am a big believer in GPs making a substantial commitment to their fund (and it not be funded by loans or management fee offsets), as it demonstrates a belief in the strategy and helps to align GP and LP interests.

Here's a link to the Reuters article:  
http://www.reuters.com/article/2012/04/11/us-bain-idUSBRE8390Y620120411 

Here's a link to a related peHUB story: 
http://www.pehub.com/144737/bain-capital-plans-smaller-fund-may-offer-3-fee-options-reuters-exclusive/