medium · Private Equity
Consider a $1B PE fund with a 2% management fee on committed capital during its 5-year investment period.
If the fund also pays $5M in annual organizational and fund expenses, what is the total annualized 'drag' on the LPs' capital before any investments are made?
- 2.0%
- 25.0%
- 1.5%
- 2.5%
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