As we prepare to introduce direct access to evergreen funds managed by third parties, we’ve updated our fee structure to better align with industry standards.
New offerings launched are expected to no longer carry an annual access fee, and we are seeking to lower ongoing management fees and no longer plan to charge performance-based fees (i.e., promotes).
In their place, we’ve introduced a one-time, flat commitment fee. This fee is deducted from your total investment amount up front and is only charged once at the time you invest — not on an annual basis.
How does the one-time commitment fee impact returns?
You have likely noticed that many of our offerings now show a contractual rate of interest — not a targeted or potential return. Due to regulatory considerations, we are unable to show returns on these offerings that are net of the one-time commitment fee.
For consistency, returns displayed on offering materials will continue to be net of any ongoing fees (such as annual management fees), but not inclusive of the one-time commitment fee.
How can I determine the potential impact of the one-time commitment fee?
The simplest way to get a sense of how the commitment fee may potentially impact your returns is to divide the commitment fee by the target term of the investment, then subtract it from the annualized return listed on the offering materials.
Consider an illustrative investment with a 12% annualized return, 60 month target term, and 1% one-time commitment fee:
First, convert the term to years (if not already)
60 months ÷ 12 = 5 years
Next, divide the commitment fee by the term
1% fee ÷ 5 years = 0.20% fee
Finally, subtract the fee from the return
12% return − 0.20% fee = 11.80%