Investors must ask the Fund Manager what fees come with the Private Fund; how are those getting earned by the Manager and paid by the Investors. Investors should never invest in anything they don’t feel comfortable with or understand. 




Understanding Fund fees is difficult, even for experienced investors. Fund Managers pass along their organizational expenses, operating and other business-related costs to investors through all sorts of fees and other expenses; things like fund formation fees, operating expenses, front-end load fees, on-going fees, back-end load fees, early redemption fees, transfer fees, etc.




Fees are a fact when it comes to investing, so the goal is to choose a Private Fund that performs well, and it has a reasonable fee structure. 




Here are some of the most common fees associated with Private Funds




1.- Front-End Fees                






	
Subscription Fee 


	
Set-up & On-boarding


	
Organizational Fees


	
Found Formation Fee






2.- On-going Fees                   






	
Organizational Expenses 


	
Fund Management


	
Loan Servicing


	
Fund Expenses (Operating Expenses)


	
Capital Raise Fee 


	
Selling Commissions 


	
REO Construction Mgmt. Fee 


	
REO Property Management Fee 


	
REO Asset Management Fee 


	
REO Disposition Fee 


	
Debt Placement Fee 


	
SPV / SPE Expenses






3.- Back-End Fees                       






	
Performance Fee


	
Early Redemption Fee


	
Transfer Fee






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