(Reuters) Private equity firm Blackstone Group LP (BX.N) paid a $3 million ‘clawback’ to investors on a real estate fund, according to a recent filing.
A clawback is paid when a fund performs worse than hoped and the private equity executives, or “general partners,” have to refund to investors profit that may have been taken in the early life of the fund.
General partners typically take 20 percent of the profit of a fund after a certain performance target has been reached, typically about 8 percent.
Blackstone’s real estate funds have clawback provisions midway through the life of their funds, to ensure the general partners do not take more than their share of the profit.
Still, the clawback could be repaid at the end of the fund’s life, when final accounting is done on how well the fund performed.
“We anticipate that all of our funds will be profitable and any final clawbacks will be insignificant,” Blackstone said in an email.
The filing, dated Aug. 6 and earlier reported by Bloomberg, for the quarter ended June 30, said Blackstone’s general partners paid an interim cash clawback obligation of $3 million relating to a real estate fund.
Of that, $1.7 million was paid by Blackstone Holdings and $1.3 million by current and former Blackstone personnel, the filing said.
(Reporting by Megan Davies; editing by Andre Grenon)