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Charterhouse pressured to slash 2009 fund management fee amid struggle to invest capital

11 Oct 2013

euro-fire-burnVeteran European private equity firm Charterhouse Capital Partners is reportedly under pressure from LPs to cut management fees for its latest fund as it struggles to spend all the capital it collected.

Charterhouse plans to ask investors for a 12-month extension to the investment period for the €4bn buyout fund it closed in 2009, as it still has about €1.5bn of dry powder to put to work before its investment deadline next March, according to Bloomberg.

It said several of the fund major LPs have been pushing for the firm to base its annual management fee for the vehicle on the amount of capital spent rather than the fund total.

Charterhouse is currently charging an annual management fee of 1.5 per cent of the total fund, or €60m.

The vehicle began investing after holding its first close in October 2008 and was closed in March of the following year.

Earlier this week it emerged that Charterhouse-backed French clothing retailer Vivarte was in talks with its lenders to reset its debt covenants, to make its debts of €2bn more manageable.

The talks with banks and investors will focus on amending loan documents to prevent further covenant breaches, said Reuters, citing banking sources.

Charterhouse could provide equity funding to the business, said the sources.

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