Fees and Expenses Provisions in Investment Fund Agreements

Disclosure and Reporting Obligations, Investor and Sponsor Concerns

Recording of a 90-minute premium CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, November 19, 2020

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will provide private equity counsel with guidance on drafting and negotiating fees and expenses provisions in investment fund agreements. The panel discussion will include current trends in deal terms as revealed in the 2020 Fees and Expenses Benchmarking Survey (the Survey). The Survey is to be published by Private Funds CFO in Nov 2020 and Troutman Pepper was an influential contributor to the project.


When sponsors and investors negotiate the terms of an investment fund agreement, the treatment of various fees and expenses is often a much-negotiated issue. From fund design through regulatory review and enforcement, the costs borne by an investment fund are a point of intense focus. The treatment in fund LPAs of fees and expenses at the fund's inception is often determinative of the success of a regulatory exam down the road.

Investors demand full disclosure of fees and expenses in the agreement. They will measure compliance with that disclosure throughout the life of the fund, often requiring annual confirmation that the fund has not exceeded the bounds of the LPA in that regard. There is always the threat of regulators examining expense records and comparing them to the disclosures in the fund's offering documents.

In response to investors' desire for greater transparency, and the regulatory push for more upfront disclosure, expense provisions in fund governing documents are getting longer and more detailed. They must address investment evaluation expenses, marketing costs, expenses associated with monitoring investments, broken deal expenses, treatment of co-investors, calculation of transaction and management fees, and reporting obligations and other operating costs, among many others.

The Survey took a deep dive into many expense issues and shed some light on how they are allocated between sponsors and investors.

Listen as our authoritative panel discusses the current thinking on fund fees and expenses, as indicated in the 2020 Survey. The panel will also provide guidance in the drafting of fees and expenses provisions and discuss best practices in disclosure and reporting to minimize the risk of regulatory scrutiny.



  1. Fees and expenses generally
    1. Transaction fees
    2. Management fees
    3. Breakup fees
    4. Regulatory concerns
  2. Trends in recent fund agreements: 2020 survey
    1. Greater disclosure
    2. Expenses charged to co-investors
    3. Break-up fees
    4. Capping of fund fees
    5. Regulatory costs
  3. Implications of reduced fees payable to sponsor


The panel will review these and other key issues:

  • Why are fees and expenses such a contentious issue between sponsors and investors? Which are the most sensitive?
  • What are the most significant trends revealed by the 2020 Fees and Expenses Benchmarking Survey about fees, expenses, and reporting?
  • How have transaction and management fees evolved?
  • What are the chief concerns for co-investors about fees and expenses?


Bianchi, Patrick
Patrick J. Bianchi

Troutman Pepper

Mr. Bianchi is a member of the firm’s Corporate, Private Fund Services and Emerging Growth and Venture Capital...  |  Read More

Corelli, Julia
Julia D. Corelli

Troutman Pepper

Ms. Corelli is a member of the firm’s Corporate, Private Fund Services and Private Equity Practice Groups. She...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video