Management Fee

A Management Fee in private equity or venture capital is the payment to the fund's management company for overseeing and managing investments. It's typically a percentage of committed capital or assets under management (AUM). The fee can vary but often starts at around 2%. During the active investment period, it's based on committed capital, while after, it might be based on net invested capital. This fee covers operational expenses of the management company but is paid irrespective of fund performance, unlike the performance fee (carried interest).