Happy Friday, Funds Family!

Two weeks ago, we kicked off our first ✅ State of the Market Survey Results series by looking at market sentiment, LP check size trends, and allocation priorities.

In ✅ Part 2 last week we focused on how GPs are structuring management fees, including rate trends, fee bases, and post-investment period adjustments.

In this Part 3, we’re discussing the types of fees, other than management fees, charged by GPs.

Here’s what the responses revealed. 👇

First, some quick context. 🧭

Before we dig into the data on additional fees, it's helpful to know who’s behind the responses. Over half of survey participants identified real estate as their primary asset class, and most funds reported target fund sizes between $10 million and $100 million.

That breakdown helps explain some of the fee patterns we’ve seen in this series so far, particularly around management fee structures and the broader use of additional fees, as we will explore further in this article.

🔧 Additional Fees: A Near Even Split

We asked GPs whether they implement additional fees beyond management fees—such as acquisition, disposition, or property management fees.

• 54% said No, they stick to management fees only

• 46% said Yes, they charge one or more additional fees

💡 Nearly half of GPs report charging fees other than management fees. That figure may be influenced by the number of real estate funds in our sample, where—as discussed below—additional fees are more common than other asset classes. 🏘️

💼 Additional Fees Breakdown: Acquisition Fees Lead the Pack

Among managers who charge additional fees beyond management fees, acquisition fees (typically charged as a percentage of the gross acquisition price) remain the most common, appearing in 84% of responses.

Development/construction fees (46%) and property management fees (43%) also showed up frequently, reflecting the operational demands of real estate-heavy strategies.

Other highlights include:

• 38% reported loan origination fees

• 27% charge disposition fees

• 14% implement closing fees

• 8% selected “Other”

💡 The prominence of fees like acquisition, development, and property management likely reflects our real estate-heavy respondent pool, where charging these fees is market standard. These results shouldn’t be assumed to reflect broader trends across venture, private equity, or credit strategies, where such fees are far less common.

Additionally, some private equity funds may also charge “closing fees” (essentially acquisition fees), though these are more common in independent sponsor deals than in comingled PE funds. 💼

🔢 Acquisition Fees: Ranges Vary, But 1% Is Still the Reference Point

Among managers who charge acquisition fees, the responses showed meaningful spread:

• 37% charge between 1% and 1.5%

• 37% charge more than 2%

• 27% report fees in the 5%–7% range

• 0% charge less than 1%

💡 While fees around 1% remains a common reference point, the results show that higher acquisition fees are not uncommon. Fees in the 5%–7% range likely reflect real estate strategies with intensive acquisition, development, or value-add work, where the fee is tied more closely to the sponsor’s significant operational efforts.

🧾Closing Fees: Used Sparingly, But Not Uniformly

Among GPs who charge closing fees:

• 50% charge between 1% and 1.5%

• 50% charge more than 2%

• 0% reported fees below 1%

• 0% reported fees between 5% and 7%

💡 Closing fees, which are often synonymous with acquisition fees in private equity context, are relatively rare but not unheard of. The split between moderate (1%–1.5%) and higher fees (2%+) suggests varied use cases, possibly reflecting a mix of independent sponsor-style transactions and deals requiring more hands-on sourcing or structuring.

💸Disposition Fees: Mostly Modest, But Some Climbing Higher

Most GPs charging a disposition fee are in the 1%–1.5% range, with:

• 56% charging between 1% and less than 1.5%

• 22% charging between 5% and less than 7%

• 11% charging less than 1%

• 11% charging more than 2%

💡 A disposition fee around 1% appears to remain the norm, but as with acquisition and closing fees, we’re seeing some upward deviation. That may reflect heavier involvement in the sale process, particularly in deals where sponsors are spending decent time and effort on negotiations, diligence, and execution end-to-end.

✍️ Loan Origination Fees: Most Stick to 1%–1.5%

Most GPs that charge a loan origination fee keep it relatively modest:

• 54% fall in the 1%–1.5% range

• 31% charge less than 1%

• 16% are on the higher end, with fees above 2% or in the 5%–7% band

💡 85% of respondents who charge a loan origination fee fall in the 0–1.5% range, with just a small minority charging more than 2%.

This tracks with what we typically see for real estate funds or syndications, where origination fees are more common and usually tied to direct lending or financing activity. Given the high concentration of real estate GPs in the respondent pool, the prevalence of this fee type is likely reflective of that segment.

🧱 Development and Construction Fees: Clustered Around 3% and 7%

We asked GPs who charge development or construction fees what their typical percentages look like.

Here's how the responses broke down:

• 33% reported fees in the 3%–5% range

• 33% reported fees in the 5%–7% range

• 22% charge more than 7%

• 11% fall in the 1%–3% range

💡 This distribution is fairly consistent with what we see in practice. Most fees hover around the 5% mark, though some creep higher depending on the sponsor’s role, workload, and risk.

🏘️ Property Management Fees: Most Land Between 5% and 7%

Fees for property management services clustered in the midrange, with a notable tilt toward the 5%–7% bracket:

• 44% reported fees between 5% and 7%

• 22% reported fees between 3% and 5%

• 22% reported fees between 1% and 3%

• 11% reported fees above 7%

💡 The majority of respondents charge between 3% and 7% for property management, with a strong concentration in the 5%–7% band. This is consistent with what we typically see in real estate strategies.

Thanks for reading, everyone.

Have a great weekend! 🙌 

⚠️ Note: This newsletter is for informational purposes only and nothing should be considered legal advice. For that, hire a lawyer! I am a lawyer, but not your lawyer (unless I actually am your lawyer because you’ve signed an engagement letter and we’re working together). This newsletter may be considered attorney advertising.