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Maryland's state pension system reported $372 million in investment fees for fiscal 2018. Independent analysis put the real figure between $460 million and $570 million, because carried interest, the performance-based share of profits private equity managers keep, wasn't in the total (PlanSponsor, "Maryland State Pension Now Required to Report Carried Interest on Assets," 2019). That gap, as much as 35% of total fees, isn't an outlier. It's what happens when management fees get itemized in every actuarial report and carried interest doesn't.
Public pension disclosures are supposed to show fund managers what allocators actually pay for private markets exposure. In practice, they show two different things depending on the fee type. Management fees are reported consistently, almost everywhere. Carried interest is reported inconsistently, and where it is disclosed, it's usually because a state legislature forced the issue, not because the pension system volunteered it. This piece breaks down what these fees actually are, what current disclosures reveal, where the gaps sit, and what it means for fund managers preparing for public pension due diligence.
To read more about management fees vs. performance fees regarding public pension plans, visit another blog here.
The Basics: What These Fees Actually Are
Management fees are the fixed annual charge a fund manager collects to cover operating costs: salaries, deal sourcing, legal, and overhead. They're typically calculated as a percentage of committed capital during a fund's investment period, usually 1.75%-2.00%, and step down 20-25 basis points once the fund moves into its harvest period and is drawing less capital for new deals (Callan, "2024 Private Equity Fees and Terms Study," August 2024). Because they're billed on a fixed schedule and appear on every capital call notice, management fees are the easiest fee type for a pension system to track and report. That's exactly why they show up cleanly in almost every disclosure.
Carried interest (also called "carry") is different in kind, not just size. It's the general partner's share of a fund's investment profits, standard practice is 20%, paid out only after the fund has returned investor capital plus a preferred return (commonly 8%, used by 84% of funds in Callan's dataset) to its allocators. That preferred return is the "hurdle rate": the minimum return LPs must receive before the GP earns anything. Carry is typically distributed through a "waterfall," a sequenced payout structure that determines when and how profits split between allocators and the manager, and some structures include a "clawback" provision requiring the GP to return carry already paid if later losses mean it took more than its agreed share over the fund's life.
The structural reason carried interest is harder to disclose than management fees comes down to timing and calculation complexity. A management fee is a known, contractual percentage billed on a fixed schedule. Carried interest isn't earned or calculable until deals are realized, years into a fund's life, and depends on fund-level performance that isn't finalized until an exit or valuation event. That makes it far easier for pension staff, and for the data systems many pension accounting offices use, to report cleanly on management fees while treating carried interest as a figure to be reconstructed after the fact, or not reconstructed at all.
Rather than reconstruct this from CAFRs one plan at a time? Dakota Marketplace Fee Studies normalizes fund-level fee data across the full US public pension universe. Book a demo.
What Disclosures Actually Show
Maryland isn't unique. CalPERS disclosed $700 million in carried interest for 2015, and Pennsylvania PSERS reported $5.17 billion cumulatively across 1980-2017 once it started tallying the figure (PlanSponsor, 2019). Those are real numbers, which already puts these plans ahead of most peers: Pew Charitable Trusts studied the 73 largest state pension funds (~$4 trillion in assets, FY2021) and found only four made a good-faith effort to comprehensively disclose private equity fees in 2014, rising to at least ten by 2021. Pew estimated undisclosed PE fees, including carried interest, average 1.5%+ of annual assets, roughly half of total PE management costs going unreported at most plans (Pew Charitable Trusts, October 2023). Just five of the 73, South Carolina Retirement System, Missouri SERS, CalPERS, North Carolina Retirement System, and Pennsylvania PSERS, report fees by individual manager.
California shows the same gap in a sharper form. Its Government Code Section 7514.7 requires disclosure of portfolio company fees, the monitoring, transaction, and advisory fees PE managers bill directly to companies they own. Where disclosure is mandatory (commitments from 2017 onward), 234 funds reported $41.3 million. Where it's voluntary (legacy pre-2017 funds), 70 funds reported just $1.1 million combined, with 56 of those reporting zero nine years after the law took effect (Private Markets Insights, September 2026, analysis of CA Gov. Code §7514.7 disclosures). At Orange County Employees Retirement System, portfolio company fees came to $42.4 million, roughly 25% on top of its $169.4 million reported management fee bill. Mandatory disclosure produces real numbers. Voluntary disclosure produces almost nothing.
What Public Pension Boards Now Expect on Fee Transparency
What increases confidence: Proactively offering ILPA-template-formatted fee and carry data rather than waiting to be asked. Applying the same disclosure standard to older, legacy vehicles as to new ones, since the California data shows legacy-fund non-disclosure is exactly what draws scrutiny. Itemizing carried interest and portfolio company fees even in states without a statute requiring it.
What erodes confidence: Reporting management fees cleanly while treating carried interest, monitoring fees, and portfolio company fees as figures to be requested separately. Inconsistent reporting formats across funds in the same family, particularly between funds raised before and after a manager adopted better reporting practices. Providing fee data only after legal counsel or a state audit forces it, since that timing itself becomes part of the pension's diligence file.
Where to Find This Data
CAFRs and fund websites give you raw data on individual funds: time-intensive, inconsistently formatted, and requiring normalization before numbers are comparable across funds.
FOIA requests are effective where direct publication is incomplete, with response timelines of 30-90 days and some states exempting certain fee data from disclosure.
Consultant benchmark studies from Callan, NEPC, and Aon publish category-level fee ranges annually. Useful for understanding where your strategy sits in the market. Not useful for seeing what specific funds have paid specific managers.
Dakota Marketplace Fee Studies aggregates fund-level fee data from public pensions at scale, normalized and filterable by strategy, asset class, fund size, and geography. It is the only source that shows what specific funds have paid specific managers across the full U.S. public pension universe, without requiring you to build and maintain that dataset yourself.
See What Comparable Managers Have Actually Charged
Dakota Marketplace tracks 1,400+ public pension funds and 35,000+ investments, with fee study data filterable by strategy, asset class, fund size, and state.
If you are setting fees for a new fund, preparing for a public plan RFP, or benchmarking what comparable managers have charged funds on your target list, this is the data your process is currently missing.
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