# Fees & Expenses {% embed url="" %} ## Management Fees By default, Tactyc will start off with as management fee of 2.0% on committed capital for 10 years. You can edit the following: * **Value:** Fee Percentage (%) * **Fee Basis Methods:** We support multiple fee-basis methods (see below) * **Start Month**: the starting month for a fee tier * **End Month:** the ending month for a free tier. ### Supported Fee Basis Methods | Fee Basis | Description | | ------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | | Committed Capital | In each period, fee is charged based on the total committed capital to date by LPs only | | Called Capital Each Period | Fee is charged based on the called capital in that period. | | Gross Cumulative Called Capital | Fee is charged on cumulative called capital to date. | | Net Cumulative Called Capital | Fee is charged each period based on the total called capital to date from LP’s *less* capital returned to LP’s to date | | Cumulative Invested Capital | Fee is charged based on cumulative invested capital (initial and follow-on investments) to date | | Fair Market Value | Fee is charged based on the fair market value of *active investments* each period | | Unrealized Investments | Fee is charged based on the total cost basis of unrealized active investments | ### **Examples** #### **Committed Capital**
DefinitionExample
In each period, fee is charged based on the total committed capital to date by LPs only

2.0% Fee

Total Committed Capital in Period 1: $50mm Total Committed Capital in Period 2: $100mm

Fee in Period 1: $50mm x 2.0%

Fee in Period 2: $100mm x 2.0%

#### **Called Capital**
DefinitionExample
Fee is charged based on the called capital in that period.

2.0% Fee

Called Capital in Period 1: $1mm

Called Capital in Period 2: $0mm

Called Capital in Period 3: $2mm

Fee in Period 1: $1mm x 2.0%

Fee in Period 2: $0mm x 2.0%

Fee in Period 3: $2mm x 2.0%

#### **Net Cumulative Called Capital**
DefinitionExample
Fee is charged each period based on the total called capital to date from LP’s less capital returned to LP’s to date

2.0% Fee

Cume Called Capital in Period 1: $10mm

Cume Capital Returned to LP’s in Period 1: $0mm

Cume Capital in Period 2: $20mm

Cume Capital Returned to LP’s in Period 2: $2mm

Fee in Period 1: ($10mm - $0mm) x 2.0%

Fee in Period 2: ($20mm - $2mm) x 2.0%

#### Cumulative Invested Capital
DefinitionExample
Fee is charged based on cumulative invested capital (initial and follow-on investments) to date

2.0% Fee

Cume Invested Capital in Period 1: $10mm Cume Invested Capital in Period 2: $20mm

Fee in Period 1: $10mm x 2.0%

Fee in Period 2: $20mm x 2.0%

#### Fair Market Value
DefinitionExample
Fee is charged based on the fair market value of active investments each period

2.0% Fee

Unrealized FMV in Period 1: $10mm

Unrealized FMV in Period 2: $20mm

Fee in Period 1: $10mm x 2.0% Fee in Period 2: $20mm x 2.0%

#### Unrealized Investments
DefinitionExample
Fee is charged based on the total cost basis of unrealized active investments

2.0% Fee

Cost basis of unrealized Investments in Period 1: $10mm

Cost basis of unrealized Investments in Period 2: $20mm

Fee in Period 1: $10mm x 2.0%

Fee in Period 2: $20mm x 2.0%

### **How to model step-downs in fees?** Let’s say your fund’s fee structure is: * 2.0% for first 5 years * 1.5% thereafter To model this structure, you will create **2 different fee tiers** as follows. To add a fee tier, click on **Add Fee Tier** at the bottom of the Management Fees section.
### **How to model different fees for different LP’s?** You can create multiple fee profiles for each LP and in a later Limited Partners section, point LP’s to their specific fee. To create multiple fee profiles, * Click on **“+”** icon next to **Default Fee Profile** to create a new fee definition * Enter a name for this fee profile for e.g. Class B LP Fees and click on **Add Fee Tier**. This will create a new fee profile from scratch. * Later in the wizard, in the Limited Partners section, you can point your Class B LP’s to this fee profile.
### **How to model management fee recycling?** Management fee recycling means the fund can recycle exit proceeds up to the level of management fees earned to date. To turn this on, fore each fee tier, open the **Optional: Management Fee Recycling** section and enter the % of fees that can be recycled from that tier.
## **Fund Expenses** Similar to management fees, fund expenses can be defined on a line-item basis. * Click on **Add Expense** * Enter the **Expense Category** * Enter the expected **Monthly Amount** * Enter the **Start Month** and **End Month** i.e. the term of the expected expense
--- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.tactyc.io/portfolio-construction/construction-wizard/fees-and-expenses.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.