Monitoring Fee
An annual fee of $0.5M-$3M paid by the portfolio company to the GP for ongoing oversight services. Charged over the hold period, with cumulative monitoring fees on a 5-7 year hold typically reaching $5M-$15M per portfolio company. The fee is paid from portfolio-company cash (same indirect-LP-cost structure as transaction fees), and is typically included in the fee-offset provision. Monitoring-fee acceleration on early-exit deals has been a frequent SEC enforcement target since 2015; institutional LPs scrutinize monitoring-fee disclosure rules and acceleration provisions in the LPA closely.
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Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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