MG Stover & Co. | Expense Best Practices for Closed End Funds
Delivering boutique fund administration and accounting services to the alternative investment industry including: hedge funds, venture capital funds, private equity funds, real estate funds, and family offices.
Fund Administration, Fund Accounting, Hedge Fund, Private Equity, Venture Capital, Family Office, Trust Accounting, Partnership Accounting, Portfolio Aggregation
post-template-default,single,single-post,postid-8903,single-format-standard,ajax_fade,page_not_loaded,smooth_scroll,,qode-theme-ver-3.4,wpb-js-composer js-comp-ver-5.0.1,vc_responsive

Expense Best Practices for Closed End Funds

  |   Best Practices, PE | VC | RE


Private Equity, Venture Capital and Real Estate fund advisors have a fiduciary duty to fully and fairly disclose how expenses will be assessed and allocated across entities and how fees will be collected across all entities.


Investment advisors should have written policies and procedures in place and the CFO and/or COO has primary responsibility for overseeing and monitoring the policies and procedures. 

The Golden Rule of Disclosure…

If there is a substantial likelihood that the disclosure of an omitted fact would be viewed by a reasonable investor as important to its investment decision, then the fact is material and disclosure is required.

Once I know what to disclose, where and when do I need to disclose this?

  • Formation Documents

    Private Placement Memorandum or Offering Memo

  • SEC Filing

    Form ADV – Part 2

  • Audited Financial Statements

    Disclosed in Notes

  • Other Communications

    Specific disclosure to advisory boards and/or investors

Can MG Stover assist with the design, implementation and maintenance of our Expense & Fee Disclosure and Allocation policy?

We have assisted many of our clients with ad-hoc consultation and support around fee/expense allocation policies & procedures and now offer our clients a free template (BELOW) as a starting point. In addition, our combined Fund Administration + Corporate Accounting Services include preparation, oversight and monitoring of the Fee & Expense Allocation Policy.