Private Equity Management Fee Drag Calculator

See how headline management fees and carry reduce limited partner cash when a fund hits its target gross MOIC. Enter your commitment and the fee rate to reveal total dollars diverted to the general partner, net cash returned to LPs, and the percentage drag those fees create.

Limited partner commitment subject to management fees.
Headline management fee charged on committed capital.
Defaults to 5 years if blank.
Defaults to a 1.80x gross multiple of invested capital.
Defaults to 20% carried interest on profits.

For diligence only—consult fund documents to confirm fee mechanics, hurdles, and offsets.

Examples

  • $25,000,000 commitment, 2% fee, 5-year period, 1.80x gross MOIC, 20% carry ⇒ Total management fees across 5.00 years: $2,500,000.00 • Projected carry at 1.80x: $5,000,000.00 • Net LP cash returned: $37,500,000.00 (1.50x) • Fee drag vs committed capital: 10.00%
  • $12,000,000 commitment, 1.5% fee, 4-year period, 2.10x gross MOIC, 15% carry ⇒ Total management fees across 4.00 years: $720,000.00 • Projected carry at 2.10x: $3,780,000.00 • Net LP cash returned: $21,780,000.00 (1.82x) • Fee drag vs committed capital: 6.00%

FAQ

Does this calculator include preferred return hurdles?

No. It treats carry as immediately payable on profits. Add your hurdle rate separately to see whether a fund would clear it before carry is distributed.

How should I model step-down fees after the investment period?

Adjust the investment period input to reflect your blended effective fee rate. For example, if fees fall from 2% to 1.5%, shorten the years or lower the fee percentage to match the weighted average.

Can I test multiple exit scenarios?

Yes. Re-run the calculator with different gross MOIC assumptions to see how net LP multiples shift as exits outperform or undershoot the base case.

What if my commitment is called gradually?

Because many funds charge fees on committed capital regardless of capital calls, the calculator uses commitment rather than invested balance. If your manager charges on invested capital, substitute the drawn amount in the commitment field.

Additional Information

  • Management fees are assumed to accrue on committed capital for the entire investment period.
  • Carry applies only to profits above returned capital and ignores hurdles or catch-up mechanics.
  • Results exclude monitoring fees, broken-deal costs, and other fund expenses that also reduce LP returns.

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