"When we don't sleep at night, we don't want the general partners to sleep at night."

-- A former pension fund CIO

From where limited partners sit, private equity partnerships have been nothing but less than equal. Historically, general partners have tended to call the shots and dictated terms, while LPs whose money the GPs manage, have, to their ever-wearying dismay, gone with the flow. Nine pension funds groused in a 1996 study that terms and conditions for private equity partnerships hadn't changed much in 20 years despite the growth in maturity and size of the industry.

But the global financial crisis in 2008 tipped the scales in LPs' favor, and raising a fund remains daunting today. Just as asset values are recovering nicely after the lows of 2008 and 2009, institutional investors fear the impact of Europe's debt crisis on portfolios, not to say the uncertainties that a lack of resolution portends. Banks are constrained to underwrite new buyouts and large refinancings, which doesn't bode well for private equity.

Meanwhile, a significant pile of uninvested capital remains marooned in PE funds. GPs oscillate between paying high multiples just to deploy capital or begging LPs' indulgence for extensions on funds nearing investment deadlines.

All this has put the supply-­demand equation into sharp focus as more private equity funds return to market. Most LPs, especially those that ramped up allocations during the boom, have scaled back.

The upshot: There are simply fewer dollars to go around. In short, LPs may not be sleeping any better, but at least they have company.

It's taken at least two huge bubbles and a liquidity crisis, but for once LPs might agree that they're moving closer than ever to that holy grail of partnerships: alignment of interest. In part, they have the trade group Institutional Limited Partners Association to thank for instigating best-practices guidelines that LPs can wave in front of every GP.

If recent surveys are to be believed, GPs have almost universally acceded to ILPA's demands for greater transparency and better economics on transaction fees. "There have definitely been concessions from every GP," says one manager of a large European pension fund.

Concessions are far from uniform, however. The larger the fund size being raised, the greater the incentives usually. Last year Blackstone Group LP, trying to top off a $16 billion-plus megafund, offered the Oregon Investment Council an 80% share of transaction fees, up from the 65% initially offered to other LPs.

That set off another trend: the bigger the pension fund's commitment, the better the incentives package. Earlier this year Kohlberg Kravis Roberts & Co. LP, which recently endorsed ILPA's guidelines, also approached Oregon, one of its largest and most loyal LPs, pledging to give it 100% of transaction fees, more in line with ILPA guidelines.

KKR also accepted a 7% hurdle rate. Until then, KKR was one of a select few funds without a hurdle rate, the rate of return on investments the firm must reach before it receives a dollar of carried interest or its share of profits.

Some GPs, such as Bain Capital LLC, offer a menu of choices. For its second Asia fund, Bain offered either a standard 2% management fee and 20% carry or 1% management fee and 30% carry. This raised a new type of number crunching for LPs to model out with hurdle rates and other factors, but it's not a science.

Fundamentally, it boils down to who the GP is and how big a fund it wants. Oversubscribed funds can command their terms, though these are few and far between. Some institutions don't mind paying higher-than-market rates for superior performance, but the challenge is that there's not been outperformance.

Just how substantive -- or permanent -- these changes are remains to be seen. So far the consensus is that these are less dramatic than LPs would like. Preqin Ltd.'s latest survey in November showed the median management fee for the largest funds has moved down to 1.71%, versus 2% historically; carry remains at 20%.

Given a real choice, most LPs would prefer to cover a GP's budget rather than pay a management fee based on a fund's size. They'd rather that GPs didn't collect their carry before all invested capital is returned, and that they not extract transaction fees from portfolio companies at all.

Still, LPs will take what they can get for as long as the balance of power gives them an edge. It may be an unequal world, but it isn't necessarily an overly lopsided one.