Fee Structure


Equity Financing

Management Fees

  • 2% annually for four years (capped)

Administration Fees

  • One time, 4% (capped until exit) for direct reimbursement of SPV’s expenses.
  • Drawn down as expenses are incurred.

Carried Interest

  • 20% on profits up to 5x of the amount invested.
  • Proceeds in excess of 5x of the amount invested will be subject to carried interest at a rate of 25%.

Example

Gross Investment R11,200,000
Net investment into company R10,000,000
Management fees (2% over four years) R800,000
Administration fees (One time, 4%) R400,000

Upon Exit

Exit proceeds R50,000,000
Carried interest for <5x Return: (50,000,000-11,200,000 ) x 0.2 R7,760,000
Total Investor Return R42,240,000

Reserves Financing

Management Fees

  • Range between 1.5% - 2.5% over life of reserve on committed capital.

Administration Fees

  • Direct reimbursement of reserve expenses, typically uncapped.

Carried Interest

  • Typically 20% on reserve profits after return of capital. For certain reserves, in the event return exceed a given multiple, carried % may increase. For example, 25% carried interest above 3x returns.

Example

Gross Investment into Reserve R10,000,000
Net investment into Reserve R9,200,000
Management fees (2% over four years) R800,000

On Return

Reserve Returns R20,000,000
Carried interest for Return: (20,000,000-1,000,000 ) x 0.2 R2,000,000
Total Investor Return R18,000,000