When talking about a private equity fund, generally the management fees are annual payments that are made partners into a fund that will fund the managers, better known as the private equity firm. So that it will pay for the firm’s operations within the investments.
The management fees are usually based on the funds size, or how much the investor will be committing to these funds while the investments are being made. Typically at the end of the the investor’s commitment periods, usually 4-6 years, the calculations might change due to the costly fund basis, minus any of the investments that could have been written off.
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