Management fees are charged throughout the fund lifecycle but the calculation basis changes between investment and harvest periods.
During Investment Period (Years 1-5)
Management fees are calculated on committed capital and typically included in quarterly capital call notices. If you commit $100,000, the quarterly management fee is approximately $375 ($100,000 × 1.5% ÷ 4).
Capital calls will include both deployment capital (money being sent to underlying funds) and management fees. A capital call might request $25,000 total: $24,000 for fund investments and $1,000 for accumulated quarterly management fees.
During Harvest Period (Years 6-12)
Management fees shift from committed capital to invested capital. If $75,000 of your $100,000 commitment has been deployed to underlying funds, the quarterly management fee becomes approximately $281 ($75,000 × 1.5% ÷ 4).
These fees may be deducted from distributions rather than requiring additional capital calls, depending on distribution timing and fund cash position.
Calculation Start Date
Management fees begin accruing from the fund's initial closing date, regardless of when individual investors subscribe. If you join at a later closing, you typically pay management fees only from your subscription date forward, not retroactively.
Payment Mechanism
During active deployment, fees are collected through capital call notices with payment due within 10-15 business days. During harvest period, fees may be netted from distributions or occasionally require small capital calls if distribution activity is minimal.
Pro-Rata Daily Calculation
Management fees accrue daily on a pro-rata basis but are assessed and collected quarterly. This ensures investors who join mid-quarter pay proportional fees rather than full quarterly amounts.
Reporting Transparency
Every quarterly report shows management fees paid year-to-date and cumulatively since fund inception. This provides complete visibility into total fee burden over time.
Specific timing and payment mechanisms are detailed in each fund's limited partnership agreement and may vary by fund vintage.