Posts Tagged ‘Carry’

Fund of Funds Fee Structure

Thursday, November 8th, 2007

Fund of Funds typically receive a 1% management fee and 5% carry (or carried interest).   Since funds of funds are much more scalable than a direct investment fund, they can charge a lower management fee and carry and make up the difference by quickly deploying the committed capital and raising another fund.  This allows them to quickly amass a large amount of capital under management and thus earn significant management fees.