Fund Economics

What are the costs to manage a fund in dollars?

Asked by:
Community Member
Dec 22, 2023
1 answer
Accepted Answer
Feb 21, 2024
A fund has costs that are both one-time and recurring. A fund incurs one-time organizational expenses in the first year, usually in the form of legal, accounting, and state compliance expenses. Here are the vendors that typically make up those expenses.
  • State domicile filing fees (eg: Delaware)
  • Blue Sky Fees (Filed with NASAA, fees based on state where LPs reside)
  • Form ADV Filing (IARD)
  • Legal formation fees (law firm or fund administrator)
Typical estimates for organizational expenses for a small fund range from 50-100k.

A fund also incurs recurring expenses to maintain and manage the funds starting in the first year. Broadly, they are called fund administration expenses and, for smaller funds, include at a minimum the following:
  • Annual Tax Preparation
  • CPA/Accountant for bookkeeping, financial statement prep
  • Legal Operations
  • KYC/AML and other compliance expenses
  • Treasury (banking)

Typical estimates for the annual costs of a small fund range from 20-60k depending on the service provided.

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