I don't believe the 1.3% is correct, as I think it's closer to 20-25%. Data I have seen supports that they put up $1.3bn of equity in the acquisition, in additi

I don't believe the 1.3% is correct, as I think it's closer to 20-25%. Data I have seen supports that they put up $1.3bn of equity in the acquisition, in addition to ~$5Bn of debt (at ~7x leverage I think? -- that's more of the sticker shock). In today's market at least, you need to put up at least around ~30% of the purchase price as equity from the private equity firm. The Toys R Us deal had a whole bunch of issues, and the business may very well have been over-levered. I do think we should bring back stricter leveraged lending guidelines, in some form. Those fees, however, don't cover the losses the way that you think (sometimes they cover the amount contributed from the fund itself, not from its investors). I think there were only received $180M in management fees over the nearly 10 year hold paid to the 3 firms involved.