Sponsor Fee Offset
The percentage of transaction + monitoring fees collected from portfolio companies that is credited back against the management fees LPs pay. A 100% offset means LPs effectively pay no management fee until the portfolio-company-fee credit pool is exhausted; an 80% offset means 80% of portfolio-company fees become an LP credit and 20% accrues net to the GP. Pre-2010 median fund offset was around 60%; post-2020 median is around 85%; many top-quartile funds offer 100%. The shift reflects LP recognition that portfolio-company fees are an indirect LP cost (reducing enterprise value at exit) and should be netted against LP-direct fees.
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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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