What is Fee-Offset Mechanism in Private Equity?

Ropa Ushe
July 4, 2025

Distributions from portfolio companies (e.g. divi-
dends, service fees, board attendance fees) are often
not tax efficient if paid to the fund. However, they
should not theoretically be paid to the fund man-
ager, since the latter is paid (via management fees)
to manage the fund and its portfolio. Hence, this
mechanism is set up to direct the distributions to
the fund manager while compensating the fund via
reduced management fees.

Ropa Ushe

There will be a pressure to get this next appointment right and I do believe the process to find that replacement will have started a few weeks ago following that Tottenham game. The results have been a killer but equally so the team has lacked an identity and style. It’s critical that whoever is brought in now delivers that. With performance comes results. You can’t disconnect these two factors. The challenge for the new manager is he’s going to have to work with the majority of this curren