http://www.bloomberg.com/news/2014-12-31/blackstone-opens-up-about-hidden-fees-as-sec-pushes-transparency.html
Two of the biggest private-equity firms are disclosing fees that had largely been hidden as U.S. regulators demand increased transparency from the industry.
Blackstone Group LP said it could collect as much as $20 million annually from investors and companies in its next buyout fund, for services such as health care consulting and bulk purchasing. TPG Capital put the potential charge for similar services at as much as $10 million a year for its new fund, which is currently seeking to raise as much as $10 billion.
The fees, detailed in recent marketing materials obtained by Bloomberg News, are on top of other monitoring and transaction fees and haven’t been disclosed in such detail in documents governing earlier funds. The U.S. Securities and Exchange Commission has criticized the industry for passing on charges to clients without their knowledge, and is trying to persuade the $3.5 trillion private-equity industry to improve disclosure.
“We’ve entered a new day,” said David Fann, chief executive officer of TorreyCove Capital Partners, which advises pension plans on private equity investments. “Most investors will request more robust disclosure surrounding fees being paid by portfolio companies to private equity funds.”
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