Two tiers. One alignment.
LPs pay a standard 2-and-20 with an 8% preferred return. Portfolio companies pay TPC a separate schedule of transaction-level fees — 80% of which is rebated to the Fund as an offset against the LP management fee. Disclosed in the LPA. Audited annually.
Of arrangement & monitoring fees. To the Fund. Audited.
Of committed capital, yrs 1–3; invested capital, yrs 4–10.
Above the 8% preferred return hurdle. Full clawback.
Annual compounded. To LPs before any GP carry.
Placement, finders', kickbacks. Contractually banned.
Every fee, in writing, before signature.
LP-level economics
What the Fund charges its Limited Partners. Standard institutional architecture with a European waterfall and full GP clawback.
| Fee | Rate | Base | TPC Retains | LP Benefit |
|---|---|---|---|---|
| Management Fee | 2.0% p.a. | Committed capital (yrs 1–3); invested capital (yrs 4–10) | NET OF REBATES | Reduced by 80% of portfolio fees |
| Carried Interest | 20% | Net profits above 8% hurdle | GP ONLY | Subject to full clawback |
| Hurdle Rate | 8% p.a. | Annual compounded preferred return | N/A | LPs receive before any carry |
Portfolio company-level fees & LP rebate treatment
What portfolio companies pay TPC at term sheet, closing, and over the life of the transaction. Arrangement and monitoring fees are rebated 80% to the Fund — directly offsetting the LP management fee charged in Tier I. Commitment and reverse break-up fees are retained by TPC as compensation for exclusivity and wasted diligence.
| Fee Type | Rate | When Charged | TPC Retains | LP / Fund Benefit |
|---|---|---|---|---|
| Commitment Fee | 0.5–1.0% | Term sheet execution | 100% | Exclusivity compensation |
| Arrangement / Origination | 1.0–2.0% | At closing | 20% RETAINED | 80% OFFSETS LP MGMT FEE |
| Legal Expense Reimbursement | Actual cost (capped) | At closing | 0% — PASS-THROUGH | Pure cost recovery to counsel |
| Monitoring / Management | 0.5–1.0% p.a. | Quarterly in arrears | 20% RETAINED | 80% OFFSETS LP MGMT FEE |
| Reverse Break-Up Fee | 1.0–1.5% | On portfolio co. breach | 100% | Compensates wasted diligence |
On a $20M senior-secured transaction with a 1.5% arrangement fee, TPC collects $300,000 from the borrower at closing. $60,000 (20%) is retained by TPC as the GP; $240,000 (80%) is rebated to the Fund and credited against the LP management fee for that quarter. The same 80/20 treatment applies to ongoing monitoring fees over the life of the position.
The prohibited-fees covenant
Section §VII of the Governance Doctrine and the corresponding LPA covenant contractually prohibit Taper Point Capital and its principals from receiving:
- Placement fees from third-party intermediaries on Fund commitments.
- Finders' fees on portfolio-company introductions, in either direction.
- Undisclosed referral or kickback arrangements with service providers.
- Side compensation that is not disclosed in the quarterly LP report and audited.
Breach of the covenant is a defined Cause Event under the LPA, exposing the General Partner to LP-led removal in accordance with §IV of the Governance Doctrine.