By Megan Davies and Simon Meads

BERLIN, Feb 4 (Reuters) - Private equity firms will lose the upper hand to the powerful pension and endowment funds which invest in their funds, as they struggle to raise cash from sparse reserves.

Private equity heavyweights at the industry's SuperReturn conference [ID:nL3166441] in Berlin on Wednesday said investors in the funds, known as limited partners or LPs, would have more power to dictate fees and fund sizes.

"Going forward, the LPs will be heard much more and their concerns on deal fees, size of funds ... will have to be addressed," said Carlyle Group [CYL.UL] co-founder David Rubenstein.

"The pendulum will have swung ... for the next few years, they have the balance of power."

It would be a marked deviation from the boom that lasted from 2004 to 2007, when private equity executives, or general partners (GPs), were raising cash hand-over-fist and could dictate their terms to investors.

Private equity companies are looking for alternative ways to spend roughly $1 trillion of unspent investment capital as the market for leveraged buy-outs has virtually halted, but investors often question those strategies.

They also face trouble in many of the companies they have invested in, which are struggling under heavy debt piles the private equity companies have loaded them with.

The interests of private equity firms and investors had not been aligned in the last few years as the buy-out houses sold stakes in companies to each other, said Guy Hands, the chief executive of Terra Firma.