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Why Do You Advise Against Hurdle Rates, and Do LPs Prefer Them for New Funds Without Track Records?

I can see you guys advice against using hurdle rates. May I ask for the reason behind it to understand the rationale other than being not that GP friendly? Will not quite some LPs like to see hurdle rates especially for a new fund without track record it provides some more security for them?
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If you have a Hurdle Rate of 4%, then you need to get 104% returned before you get any carried interest. Since your primary compensation is through carry, this is really unfair to the GP, especially in smaller funds. You’re already making a big sacrifice due to the small fund size etc. It’s just not fair. Also, it doesn’t really de-risk the fund that much, especially when it’s small, so it’s not that beneficial.

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