medium · Private Credit fund-structures-returns-economics
A 500m PE fund charges a 2.0% fee on committed capital during years 1-5. In Year 6, the fee base shifts to 'invested capital' (400m total invested, 120m realized at cost) and the rate steps down to 1.5%.
What is the annual management fee in Year 6?
- 7.5m
- 10.0m
- 4.2m
- 6.0m
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