Why are feeder funds so expensive?
Key takeaways
The Cost Problem with Feeder Funds—and How Aqua Offers a Better Solution
Feeder funds have long been a gateway for investors seeking access to exclusive investment opportunities, such as private equity funds or private placements. However, one significant drawback has been the high costs associated with these funds. Many feeder funds charge hefty fees, which can quickly erode the returns investors expect to achieve.
Typically, investors in feeder funds face a "double layer" of fees. First, there are the fees charged by the feeder fund itself, which often include management fees, performance fees, and various administrative costs. Then, there are additional fees from the master fund, where the actual investments are made. Combined, these fees can easily exceed 3% or more annually, significantly impacting overall returns.
At Aqua, we recognize this problem and have developed a more investor-friendly solution. Unlike our competitors, who typically charge between 55-75 basis points (bps) annually—plus fund expenses (which can bring total costs to 85-100 bps)—Aqua offers feeder funds for just 35 bps of committed capital per year. And this rate includes all fund expenses, such as reporting, KYC/AML compliance, annual audits, and the preparation of K-1s.
By significantly reducing the cost burden, Aqua ensures that more of your capital works for you, not for the fund managers. With Aqua, you can enjoy access to high-quality investment opportunities without sacrificing a significant portion of your returns to fees.
For investors looking to maximize their returns while minimizing costs, Aqua is the clear choice. We’re here to help you invest smarter, not just more expensively.
