Management Fees

Payment due to a General Partner (GP) in exchange for the management of a fund. Management fees for closed-end funds typically have two phases:

• Investment Period: Management fees are charged on committed capital while the GP raises funds and finds portfolio companies to invest in. This is often the most intensive period for GPs as they scour the market for the best portfolio companies. 
• Post-Investment Period: Once the fund has closed and portfolio companies are identified, management fees either step down or are charged on invested capital. This less expensive fee reflects the relatively lower-intensity work of value creation and exiting portfolio companies.