Do GPs assess a management fee on interest collected on deposits and is it recognized by the carried interest provision as another source of fees ?
Interest collected on called capital is typically not subject to management fees and is not recognized by the carried interest provision as another source of fees. The interest earned on called capital is usually credited back to the Limited Partners (LPs) and is not considered part of the General Partner's (GP's) compensation. The management fee is generally calculated based on committed capital, and carried interest is based on the profits from investments, not on interest earned from deposits.