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Basic Question 2 of 8

Management fees of private equity funds are paid to ______.

A. GPs only
B. LPs only
C. both GPs and LPs
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User Contributed Comments 2

User Comment
ankurwa10 See the GP as the Investment Manager and LP as investors. So, investors would not really manage their own money (why go a PE player then at all), hence only the GP takes the management fee.
ibrahim18 @ankurwa10. You seem to be the author of AN. Nice work. Comments on every section
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

explain private equity fund structures, terms, valuation, and due diligence in the context of an analysis of private equity fund returns;

explain risks and costs of investing in private equity;

interpret and compare financial performance of private equity funds from the perspective of an investor;

calculate management fees, carried interest, net asset value, distributed to paid in (DPI), residual value to paid in (RVPI), and total value to paid in (TVPI) of a private equity fund.

CFA® 2024 Level II Curriculum, Volume 5, Module 38.