Private equity firms are intensifying competition for investors by initiating fee discounts and presenting additional incentives. 

The reason is a decline in dealmaking and listings. According to Sunaina Sinha, who leads private capital at Raymond James, almost all firms among their client base are considering or have already implemented various incentives to encourage swift and substantial capital investment, as reported by InvestmentNews. For example, every firm in Raymond James' suite of clients is contemplating or has employed some form of incentive for investors to put capital in as quickly as possible and in as large a size as possible. 

A recent report from Bain & Co predicts a 30% decrease in fundraising within private markets this year. The report emphasizes the significance of liquidity due to halted dealmaking and exits, leading to a competitive race among major players to revive the capital flywheel's momentum. Firms like Ardian, Cinven, CVC Capital Partners, and TPG have recently implemented strategies such as fee reductions and other incentives to attract investors. 

PE firms typically adhere to the 2 and 20 rule, entailing a 2% management fee and a 20% charge after surpassing specific performance criteria. But that may be changing. For example, some CVC investors have secured fee reductions to as low as 1.35%. 

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