TY - JOUR T1 - The Private Equity Paradox JF - The Journal of Private Equity SP - 37 LP - 40 DO - 10.3905/jpe.2003.320048 VL - 6 IS - 3 AU - James M. Hill AU - John S. Gambaccini Y1 - 2003/05/31 UR - https://pm-research.com/content/6/3/37.abstract N2 - Boards of directors have increasingly come under fire by stockholders and watchdog agencies. It is more important than ever for aprivate equity investor (PEI) to fully comprehend the complex nature of his own fiduciary duties. As a PEI, he owes a duty to his fund and its investors to maximize their return. However, as a director of the portfolio company, he owes a duty to act in the best interests of the company. When financial troubles arise, these duties are often in conflict. How well the PEI understands the nature and extent of his duties will go a long way in determining whether he will emerge unscathed or be mired in a web of lawsuits. The authors define the director duties to stockholders, the level of risk to the PEI, and how to navigate the fiduciary duty minefield in a down round. ER -