Data sourced from Dakota Private Markets, the private fund performance platform powered by Dakota. Learn More | Request Access
Every private market vehicle, whatever the strategy, prices itself with the same two levers: a base fee (usually charged on committed capital during the investment period, then invested capital or NAV afterward) and a performance fee (carry, promote, or incentive fee, usually earned only after the LP clears a preferred return, or hurdle). What differs by asset class isn't the architecture, it's where the dials get set, because the base fee and the hurdle are each pricing something different. The base fee covers the manager's cost of originating, underwriting, and managing the portfolio. The carry is the alignment mechanism, it's what the manager only gets paid if the LP actually made money above a minimum bar. Reading a fee structure well means asking what specific thing each number is compensating for, not just whether it looks high or low against a headline benchmark.
Why 2-and-20 is the reference point
2-and-20 (a 2% base fee, 20% carry) became the private markets standard because it originated in private equity and venture, where it prices something genuinely scarce: a manager's ability to source, structure, and improve a small number of privately held companies over a long, illiquid hold. There's no public benchmark a GP is competing against, and LPs can't easily verify skill in real time, so the fee has to do two jobs: cover the GP's overhead through a long deployment period (the base fee) and align the manager with an outcome the LP can't monitor directly (the carry). Once that structure worked in PE and VC, it became the anchor everyone else gets measured against, even in asset classes where the underlying economics don't actually justify the same numbers.
Private equity and venture capital
PE and VC gravitate toward 2-and-20 (or close to it) because they're pricing scarce origination and operational skill with no observable substitute. Dakota's fee data shows direct buyout funds like Clayton Dubilier & Rice, Genstar, and Vista Equity clustering at 1.5% to 2.0% base with 20% carry over an 8% hurdle. That pricing compresses sharply, though, once the manager isn't originating deals: fund-of-funds and secondaries vehicles price closer to an access fee, since the skill being paid for is allocation, not sourcing.
Private credit
Credit fees track where in the capital structure the strategy sits. Senior, first-lien direct lending is priced like a lower-risk, income-generating asset: some funds charge around 1% or even lower with just 10% carry over a 7-8% hurdle. Move down into distressed or opportunistic credit and the pricing climbs back toward PE territory, as some funds run 1.5% to 1.75% with 20% carry.
Real estate
Real estate fees split cleanly on one axis: is the portfolio stabilized or is the manager taking development/repositioning risk. Core, open-end vehicles price closer to 1%, reflecting a measurable, contractual income stream the LP can underwrite independently. Value-add and opportunistic closed-end funds tend to be closer to 1.5%, because the manager is now creating value rather than managing an existing income stream.
Infrastructure
Infrastructure follows the same core-vs-opportunistic split as real estate, and it's the asset class where the spread is widest. Core, open-end infrastructure (regulated utilities, contracted assets) prices well under 1%, some with no carry at all. Closed-end, higher-risk infrastructure price closer to PE.
Bottom line: 2-and-20 is really a price for scarce, hard-to-monitor origination skill, and PE/VC is where that skill premium is most concentrated. Real estate and infrastructure start from a visible, contractual cash yield and price meaningfully lower at the core end, but the moment either asset class takes on PE-style execution risk, the fee structure converges right back to PE economics. The asset class label matters less than where the specific strategy sits on that risk spectrum.
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