Some managers of direct lending funds have been lowering hurdle rates for their products in recent fundraising rounds. The move effectively boosts overall fees, according to consultancy Bfinance. The consultancy added, however, many managers are yet to take the step, which would be unpopular with limited partners in the funds. The consultancy said hurdle rates within the direct lending market have not been too high in 2017, if anything slight too low in some cases. Hurdle rates are the point at which performance and other fees start being applied to funds.
Some managers of direct lending funds have been lowering hurdle rates for their products in recent fundraising rounds. The move effectively boosts overall fees, according to consultancy Bfinance. The consultancy added, however, many managers are yet to take the step, which would be unpopular with limited partners in the funds. The consultancy said hurdle rates within the direct lending market have not been too high in recent years, if anything slight too low in some cases. Hurdle rates are the point at which performance and other fees start being applied to funds.