Why would anyone take this. Here’s a few things I’ve thought about:
- You have no control or say over how the firm is run
- No covenants and Class B has no rate floor, so you are last in line for any payouts
- If something happened in the markets, or the firm is badly run, you have your salary, bonus, and LP at risk, it concentrates your wealth to a single firm you have no control over.
- 20% over the last few years might not have even been better than a growth fund, so there are alternatives.
The whole structure comes down to whether you trust the current management or not.
What am I missing?