Private equity dealmaking is moving faster than ever. Competitive auction processes, compressed diligence timelines, and secondary transactions have become standard features of the deal landscape—as have post‑closing disputes. For GPs, these disputes are no longer a legal sideshow; they can reshape deal-level IRR, depress fund-level KPIs, and complicate the fundraising narrative for the next vintage.
More importantly, the outcome of such disputes often significantly affects fund performance, such as hindering future fundraising capabilities. In that environment, getting damages right is not just a legal formality, but a question deserving management attention and a way to preserve value.
Published arbitral rulings over the last three years indicate that, in case of a ruling in favor of the claimant, the average award amounted to 27% of the initial damages claim. Over the long-term, this ratio averages at around 40% of the initial damages claim.1