Management fee rates vary by private debt strategy

Read more in Preqin’s ‘Strategy in Focus: Challenges to Income Generation’

Interest rate cuts across major economies have slowed the growth of private debt, with GPs combatting fundraising headwinds by making concessions on fees and terms to secure capital. A third of direct lending funds closed in 2023 and 2024 had management fees of less than 1.25%, though 27% of funds charge more than 2%, an unusually shaped distribution. Meanwhile, the majority of special situations funds (64%) have management fees above 2.00. This may be due to the the cost and complexity of setting up different vehicles and executing investments.

Contact: William Bennett-Lynch
william.bennett-lynch@preqin.com