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An institutional investor is comparing management fees for two competing real estate investment funds. Both funds expect to begin operations and are accepting capital commitments.
An institutional investor is comparing management fees for two competing real estate investment funds. Both funds expect to begin operations and are accepting capital commitments. When the funds begin acquiring properties, capital calls will be made for capital contributions during the investment period. Fund A will charge a fee of on capital committed and on capital invested after the investment period ends. Fund will charge a fee of on capital committed and on capital invested after the investment period ends. Both funds expect to have $ in capital commitments when the fund commences operations and both project a fiveyear cycle for startup and acquisitions. Capital flows are expected as follows:
tableFund AtableContributedCapitaltableCapitalReturnedInvested CapitalYear $$$
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