A private equity fund:
I. is set up as a limited partnership
II. usually uses a 2/20 fee structure
III. places no constraints on manager compensation
IV. typically has a stated life of 7 to 10 years

Question

Quizplus · Accepted Answer

A private equity fund is typically set up as a limited partnership (I) and uses a 2/20 fee structure (II), but it does place constraints on manager compensation, as this is negotiated and agreed upon between the limited partners and the general partner. The typical stated life of a private equity fund is 7 to 10 years (IV). Therefore, the correct answer choice is D: I, II, and IV only.

A Private Equity Fund