Private equity firms will receive a periodic management fee as well as a share in the profits earned (carried interest) from each private equity fund managed.
These expenses fall into five categories: distribution charges (sales loads and 12b-1 fees), the management fee, other fund expenses, shareholder transaction fees and securities transaction fees.
In the most basic sense, the assets under management metric represents the number of dollars on which a financial firm has the legal right to claim a management fee.
