Fund economics

Market terms for a real-asset fund are well established. A typical structure pays a management fee of around 1.5–2% per year on committed capital during the investment period, then on invested capital thereafter. The carried interest — the GP's share of the profit — is typically 20%, paid only above an 8% preferred return (the hurdle) and after a catch-up that lets the GP catch back up to 20% of all profit once the hurdle is cleared.

First-time managers should stay close to those numbers. Deviations are possible — a lower fee in exchange for higher carry, a higher hurdle in exchange for no catch-up — but every deviation prompts a conversation, and every conversation costs you time and goodwill. Save the negotiation capital for the terms that genuinely matter to you.

There is one place to insist on the right terms: platform rights on capital deployed through the platform. If GPX or any other distribution platform introduces capital, those LPs should be ring-fenced so the platform earns its economics on re-ups. Build that into the LPA from day one.