Net of Fee IRR
The IRR realized by limited partners after deducting all GP fees (management, transaction net of offset, fund expenses) and carried interest. Distinct from GROSS IRR, which is the IRR at the portfolio-company level before any GP economics. Net IRR is the only meaningful metric for evaluating an LP's return on a fund investment; gross IRR flatters the GP's reported performance. Net-to-gross spread is typically 400-700 bps depending on the fee structure, with high-fee / low-offset funds running the wider spread.
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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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