Hans Lovrek stumbled on Medieval Florentine documents that showed structures were being used to align interests in ventures with high information asymmetry that were uncannily similar to today's limited partnerships. Through a method of historical institutionalism, Hans demonstrates how the same techniques have been used to solve similar problems, down the ages, and that today's private equity industry is based on ideas that successful trading nations have used before.

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Medieval Foundations of Modern Private Equity with Hans Lovrek! 📜🏦

🎥 Join us as Hans Lovrek, Founder of Commenda Private Equity, uncovers the historical foundations of modern private equity by analyzing medieval Florentine documents, revealing structures similar to today's limited partnerships.

Key Highlights:

📜 Historical Parallels:

Medieval Commenda and Modern LPs: Discover the striking similarities between medieval commenda contracts and today’s limited partnerships, including profit sharing, limited liability, and fixed durations.

Profit Sharing: Medieval contracts had a 25% profit share for the general partner, akin to the 20% carried interest in modern private equity.

Limited Liability: Allowed investors to participate without risking their entire fortunes.
Duration: Projects financed for specific ventures with fixed terms, similar to modern funds.


⚖️ Regulatory Influence:

Role of Regulation: Increased regulation in Venice facilitated commenda contracts, reducing moral hazard and ensuring fairness.

Comparison to Modern Regulation: Historical regulation parallels modern practices, suggesting the need for a codified international structure.


🔍 Due Diligence and Moral Hazard:

GP Clawback: Mechanisms to ensure GPs returned excess profits if investments underperformed, relevant today.

Challenges of Information Asymmetry: Both medieval and modern investors face similar challenges in monitoring GPs and ensuring aligned interests.


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Contact Information:
Fund Shack is a private equity podcast and global media channel for alternative investment professionals, produced by Linear B Group.
📧 Katie Mitchell: [email protected]
🏢 Company: Linear B Group https://linearb.media/


#privateequity #venturecapital #HistoricalInstitutionalism #LimitedPartnerships #Commenda #VentureFinance #moralhazard