Management fee & carry modeler
Model total GP economics over a fund’s life — management fees with a step-down, carried interest over the hurdle, and the net-to-LP after the fee and carry drag.
| Committed capital | $100.0M |
| Mgmt fees — investment period (5y @ 2%) | $10.0M |
| Mgmt fees — post-investment (5y @ 1.5%) | $7.5M |
| Total management fees | $17.5M |
| Capital deployed to investments | $82.5M |
| Gross proceeds (2.5× on deployed) | $206.3M |
| Carried interest to GP | $21.3M |
| Net distributions to LPs | $185.0M |
| LP net multiple (after fees & carry) | 1.85× |
Simplified model — fees on committed capital with a flat step-down, full GP catch-up, single pref accrual over fund life, and full deployment assumed. Real funds vary by fee basis, recycling and timing. Educational only. Built by aama.io.
About this tool
A fund's economics come down to two GP revenue streams — the management fee and carried interest — set against the net return delivered to LPs. The classic "2 and 20" means a 2% annual management fee and 20% carry over a preferred return.
This modeler projects total management fees (including a post-investment-period step-down), the carried interest earned at a given gross MOIC, the GP's total take, and the LP's net multiple after fee and carry drag.
How to use it
- Enter the fund size and an expected gross MOIC.
- Set the management fee, step-down rate, investment period and fund life.
- Set the carry and preferred return, then read the fee total, carry, GP take and LP net multiple.
Frequently asked questions
What does "2 and 20" mean?
"2 and 20" is the classic private equity fee structure: a 2% annual management fee on committed capital and 20% carried interest on profits above the preferred return. Many funds now use lower or stepped fees.
What is a management fee step-down?
A step-down reduces the management fee rate (or changes its basis from committed to invested capital) after the investment period ends, since the GP is no longer actively deploying capital. It lowers the total fee drag over a fund's life.
How is carried interest calculated over a hurdle?
Carried interest is the GP's share (commonly 20%) of profits above the return of capital and the preferred return (hurdle). With a full catch-up, the GP receives its carry percentage of all profit above invested capital once the hurdle is cleared.
What is the difference between gross and net MOIC?
Gross MOIC is the multiple on invested capital before fees and carry. Net MOIC is what LPs actually keep after management fees and carried interest are deducted — the gap between them is the fee-and-carry drag.