
The Rewind: Lines in the Sand
The Memo by Howard Marks
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The G P Wants High Ir Rs
The fund with 95 of dollar profit will report a higher i r r because of its lower use of equity capital. The g p wants the high i r r to be competitive and win the race for capital. But the l p might also want it, especially true if the l ps are agents. If you give people the wrong incentive, you'll get the wrong behavior.
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