Hamilton Lane‘s decision to change the way it charges carried interest on one of its flagship semi-liquid funds was aimed at bringing incentives in line with other such vehicles in the industry, according to the firm’s executive co-chair. He said adjusting the compensation structure of its $4.12 billion Private Assets Fund was done to prevent it from being an outlier. In addition, as semi-liquid funds typically reinvest proceeds rather than distribute them, calculating carry in a traditional way based on distributed amounts makes less sense, said Ajay Pathak, a partner in Goodwin’s private equity group speaking to Private Equity International in London. Managers of these vehicles – which are evergreen by nature, with no defined term – also need to be able to incentivize their teams on an ongoing basis, making a NAV-based fee more appropriate, Pathak said.