„Commendae“ were the medieval sea voyages across the Mediterranean sea. Spices, garments, wine, weaponry and much more were traded between the ports of Venice, Constantinople and Alexandria. While the potential rewards were great, the voyages were risky ventures subject to storms and crusaders. The projects were financed very similarly to present private equity limited partnerships. These roots can be recognized in the word “Kommanditgesellschaft” which is the German equivalent of the limited partnership.

The roots of those similarities stem from the need to create an alignment of interest between investors and managers or limited and general partners or principals and agents. Those constellations are subject of the principal agent theory.

Ensuring a state of the art corporate governance is central to private equity investing - today just as it was 1000 years ago.