Perverse incentives and zombie funds

They discuss fee accrual on deployed capital, risks of slow exits, deploying speed, and raising follow-on funds.

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Episode notes

Today we’re going deep into the world of mining private equity with Fraser Perry.

If those words don’t mean an awful lot to you, don’t worry, because we’re going back to basics. We break down:

• What mining PE is

• The scale & impact it has on the industry

• How these investors are incentivised

• And what mining PE will look like in the future

The goal is to pull the veil off from influential groups like Orion, Appian, RCF, EMR through to Tembo, Hawkes Point and many others.

We hope you enjoy this seriously educational ep.

Connect with Fraser Perry on LinkedIn here.

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TIMESTAMPS

(0:00) What is private equity in mining?
(7:00) Understanding gross multiples
(10:40) How PE makes money in mining
(14:20) The rise of minority investments
(19:50) Project risk & investment stages
(28:40) Incentives, fees, and fund manager behavior
(41:30) Do private equity funds get the best deals?
(52:30) Shifts in the competitive landscape
(59:30) Closing thoughts & final questions

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