One of the world's largest private equity firms is dropping a controversial type of fee it charges clients.
Blackstone Group will no longer charge so-called "accelerated monitoring fees," according to The Wall Street Journal. Monitoring fees are payments a PE firm pockets from companies it buys for ongoing consulting. When one of those portfolio businesses is sold or taken public, Blackstone and others have previously collected a lump sum payment for future monitoring fees, which can be guaranteed for 10 years or more.
Blackstone will now drop those "accelerated" fees from new deals and share money from current companies with the investors in its funds, according to the report.