Much Ado About Not Too Much

Yesterday, a colleague and I spent most of the day trying to learn what happened at ILPA’s meeting of the minds between big buyout and big pension. Lots of emails, lots of phone calls. I even postponed a trip to purchase sandbags.

In retrospect, it was probably a misuse of my time. And not just because my cat can now bypass his water bowl and lick straight from the floor.

The much-ballyhooed meeting (yes, I did some of the hoo’ing) seems to have been much less than it was cracked up to be. Its purpose was to discuss the ILPA guidelines, but I’m told that the issue of fees – arguably the most vital piece of LP/GP interest alignment – wasn’t actually discussed. Moreover, giant firms like Bain, KKR and TPG weren’t in the room (which apparently was inside of the Times Square Westin).

At this time yesterday, I was trying to understand why anyone would have leaked word of the meeting to the WSJ. It didn’t seem to be in either side’s interest, given that it would only add fuel to collusion charges. But, as the day went on, I reconsidered: Maybe the leak was more important than the meeting itself. Maybe the leak was an effort to let the world know that LPs and GPs could indeed get along, and that both were working toward each other’s best interests (as evidenced by most-meeting pablum about how the meeting was “productive” and “constructive”).

To be clear (and a bit contradictory), I think meetings like yesterday’s are worth having. My understanding is that it was prompted by results from an ILPA survey about the guidelines, and that it is expected to be the first in a series of private LP/GP roundtables (no others are formally scheduled yet). Good. The more dialogue the better.

But it does not appear than anything tangible came from yesterday’s sit-down, save for some soothed feathers. And I’m not even sure that it could have. After all, some of the attending firms aren’t even close to fundraising – and the chance of them substantially cutting fund sizes or existing fees is lower than the chance that Rasheed Wallace will grab 10 boards per game in the playoffs.

Call me when industry standard actually change, and not just on a one-off basis. Until then, I’ve got some mopping to do…