Carry vs facilitation fee: how to choose your SPV economics
Carry, facilitation fee, management fee, and expenses — when to use each, and how to model the upfront cost to your LPs.
Sponsors usually have three economic levers on an SPV: a one-time facilitation fee, a percentage carry on profits, and an annual management fee. The right mix depends on how confident you are in the deal, how active your LP base is, and how much ongoing work the SPV needs.
Carry: pay-for-performance
Carry — typically 10-20% of profits above invested capital — is the standard sponsor compensation for venture and PE deals. It aligns sponsor incentives with LPs and only pays out if the deal works. The downside: carry is illiquid for the sponsor (it doesn't pay until distributions years later) and is taxable only when realized.
Facilitation fee: predictable upfront
A facilitation fee is a fixed dollar amount or percentage charged at close, paid by the SPV out of called capital. It compensates the sponsor for the work of organizing the deal regardless of outcome. Sponsors organizing scarce-access secondaries often use facilitation fees instead of carry.
Management fee: ongoing operations
A management fee — typically 1-2% per year — covers the sponsor's time monitoring the investment, fielding LP questions, and approving distributions. SPV management fees are commonly prepaid (e.g. 5 years collected at close) to avoid annual collection friction.
How RocketBook helps you model
RocketBook's live SPV cost preview updates in real time as you adjust carry, facilitation fee, management fee years, and expenses. You see the total upfront cost to each LP and the lifetime sponsor economics before you commit anything to paper.