Top Executives at Riverstone Holdings Face Prospect of Returning More Than $300 Million – WSJ

Top executives at Riverstone Holdings LLC, one of the world’s largest energy investment firms, face the prospect of returning more than $300 million of profits they made from investments before the oil bust erased those gains, according to securities filings and people familiar with the matter.The money is related to an incentive formula employed at private-equity firms in which executives earn a cut of profits above a certain threshold for each fund.In Riverstone’s case, profits in some of its funds shriveled after U.S. oil prices plunged to below $27 a barrel earlier this year from more than $100 in mid-2014. That decline reduced the value of some companies owned by Riverstone, eliminating paper gains and could require some executives to return profits in a so-called clawback if the investments don’t regain value before the funds that hold them are liquidated.David Leuschen and Pierre Lapeyre Jr., who founded Riverstone and remain its majority owners, are the primary recipients of its portion of deal profits, known as carried interest. Through a spokesman, Messrs. Leuschen and Lapeyre declined to comment.While most private-equity funds usually keep details of their fund performance and structure private, industry executives say clawbacks are rare. Most firms want to avoid having to recall payments made to executives, some of whom may have left the firm or already spent the cash.

Source: Top Executives at Riverstone Holdings Face Prospect of Returning More Than $300 Million – WSJ

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