Private equity fees are ‘ugly' and have become a way to generate money when they were previously used to cover costs, according to Steve Koltes, co-founder and co-chairman of London-based private equity firm CVC Capital Partners.

Speaking at the annual SuperReturn conference in Berlin on February 23, Koltes said that in order to make the relationship between private equity firms and their investors "more entrepreneurial" compensation should to be directly related to fund performance.