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Impact fund managers are increasingly starting to tie management compensation to the achievement of impact goals, according to new research from Impact Capital Managers (ICM), a membership body for Northern American private capital funds managing over $12bn collectively.
The research, Legal Innovation in Impact Investing, was conducted with law firm Morrison & Foerster, and draws upon anonymous surveys with ICM’s 67 members who include the likes of Bain Capital, Bridges Fund Management, Morgan Stanley, KKR and TPG Rise Fund.
Carried interest - a key metric in private equity - is effectively a way to financially compensate GPs to meet or exceed financial targets. Fund managers get paid a percentage of the fund’s profits - so it’s a way to ensure GPs and LPs interests are aligned. Linking impact fund managers’ carried …