Fees and waterfalls

Overview

A fund pays management fees from its first day of operations, so the fee engine is core infrastructure, not an add-on. Everything in this area produces a versioned calculation run with a preparer, a reviewer, and an approver, and ties out to an Excel workpaper — because a fee calculation nobody can reproduce is not a fee calculation an auditor will accept.

The management fee engine

The fee engine supports the levers real fee schedules actually use:

• Fee base — committed, called, invested, or NAV
• Fee rate and period proration
• Step-downs at the end of the investment period
• Fee waivers and fee offsets (transaction, monitoring, and placement fees)
• Investor-specific discounts and side-letter overrides

Side-letter terms are stored as structured rules rather than a note in someone’s inbox, and a rule must be approved before it is allowed to affect a calculation.

Expense allocation

Fund and organizational expenses allocate across LPs on whichever basis the fund’s documents call for — commitment, ownership, NAV, deal participation, or a custom basis — with support for expense caps, organizational expense caps, and broken-deal tracking for costs incurred on deals that never closed.

Waterfall and carry guidance

This is the one place in the platform where the boundary between “calculation” and “guidance” matters most, so it is worth stating plainly: NAVdryx does not produce a final carry number that drives journal entries, LP statements, or distribution notices. Once a fund’s governing documents have been extracted and the extracted terms reviewed and approved by a person, those terms feed a waterfall model — preferred return rate, GP catch-up, carry split, deal-by-deal versus whole-fund treatment, clawback provisions, escrow holdback, and per-LP carry exceptions. You can enter a hypothetical or planned distribution amount and see the expected allocation rendered tier by tier, with the governing-document clause cited inline at each tier.

Guidance output includes:

• Illustrative distribution allocation by tier
• Current preferred-return shortfall or surplus
• Cumulative carry earned to date, on both a realized and an unrealized basis
• Clawback exposure if the fund were liquidated at current NAV
• A forward look at when carry is expected to begin, under assumptions you supply

Every guidance output is labeled: illustrative guidance based on the extracted terms of the named document and section, not a final calculation. Final carry, distribution allocation, and journal entries are still calculated and approved by the fund accountant or third-party fund administrator, outside NAVdryx, until the deterministic waterfall engine ships — deliberately sequenced after the management fee engine has been validated against several quarters of live fund data. Until then, guidance output exists to support GP, finance-team, and LPAC discussions — it cannot be promoted to a journal entry, included in an LP statement, or used as the basis for a distribution notice.