How to Track Management Company Expenses After Close

How to track management company expenses is the ledger you keep after close: which costs sit on the GP management company (paid from the management fee) versus which are fund expenses billed to LPs. It is not a fee offset and not a fee waiver. Raziel's management fee offset tracking page is Fee Income that reduces the installment. Raziel's broken deal expense tracking page is one abort-cost row per dead pursuit. This page is the split: salary and overhead versus fund legal, audit, broken-deal, and admin.

This is not legal, tax, or investment advice. Raziel does not provide it. Copy the expense clause from the signed LPA and the amounts from the notice or capital-account pack. Do not invent an ILPA fee percent.

What this ledger is (and is not)

ILPA Principles 3.0 (June 2019): overhead, salaries of the GP's employees and any relevant advisers or affiliates, and travel and other manager costs on behalf of the partnership should be borne by the manager under the management fee, rather than allocated to the fund. ILPA's March 2023 analysis of the SEC Private Fund Advisers proposal: expenses that benefit the firm broadly, and not solely or primarily the fund, should be borne by the firm. The updated ILPA Reporting Template (QRSI, January 2025) replaces the 2016 template for funds still in their investment period during Q1 2026 or commencing on or after January 1, 2026.

Seven columns on one expense row

Open one row per line item after close. Copy each field from the LPA and the latest pack. If a field is missing, store that it was missing.

• Line item. The label on the notice (salary allocation, office, third-party legal, fund audit, broken-deal, fund admin). Copy the pack's words.

• Billed to (management company vs fund). Who paid. Match the notice to the LPA clause. Your signed LPA controls. If the notice billed a management-company cost to the fund, store billed-to as fund and flag the mismatch.

• LPA clause copied. Section number and quoted phrase. Do not paraphrase "typical PE expenses."

• Period. The quarter or Payment Date the notice assigns.

• Amount on the notice. The printed dollars, not your estimate.

• Offset against the management fee (yes/no). Whether this line reduced the installment. ILPA's 2023 analysis flags double-dipping: charging a management fee that covers GP salaries while also allocating legal or compliance salaries to the partnership without an offset. Yes or no is not a Fee Income offset percent.

• Remaining fee after offset if the notice shows it. Copy the pack's remaining or net management fee for the period. If the notice is silent, store that it was silent.

Salary and overhead sit on the management company

ILPA's 2023 analysis names salaries of the GP's employees (in-house fund administration, in-house legal counsel, accounting, reporting, IR, compliance, and risk staff) plus salaries of relevant advisers or affiliates as costs that should be covered by the management fee. Principles 3.0 examples of other manager-borne costs: industry conferences, research and information services, software and subscriptions, travel, entertainment, lodging, investment consultants, books and records, regulatory registration, remedial actions from a regulatory exam, and office overhead. The ILPA Model LPA (whole of fund, July 2020) treats office overhead and Advisers Act registration (Form ADV and Form PF) as General Partner Expenses. Principles 3.0: sourcing, networking, and preliminary due diligence travel come from the management fee; after the initial term sheet, related travel is a fund cost. GP staff time to administer the fund, firm-level regulatory costs, and legal costs of an investigation of the GP or its partners stay with the GP.

Fund legal, audit, broken-deal, and admin sit on the fund only if the LPA says so

Principles 3.0: in most circumstances, LPAC and annual meeting venue and materials (not entertainment or speaker fees), third-party administration (when LPs approved the administrator), subscription-line interest, annual fund audits, and third-party legal expenses incurred specifically in connection with fund matters should be allocable in full to the partnership. ILPA's 2023 analysis adds broken deal expenses and specialized consulting. Broken-deal dollars belong on Raziel's broken deal expense tracking page as a per-deal row. Reporting Template definitions split Expenses Allocated or Paid to Investment Adviser or Related Persons from third-party partnership expenses (administration, valuation, audit, tax). CLA (2025): the 2025 update requires a distinct breakout of those internal chargebacks. If a chargeback hits the fund, billed-to is still fund. Store that it was paid to the adviser or a related person.

Offset yes or no is not the offset page

A yes on offset against the management fee is a flag that this line reduced the installment. The mechanics live on Raziel's management fee offset tracking page. Do not paste a 100 percent because Principles 3.0 prefers a full offset of portfolio-company fees. Remaining fee after offset, if shown, is copied so the expense row and the fee row can be reconciled. A waiver is a write-down of the fee itself. It is not billed-to on this row.

When the ledger holds

The row holds if line item is the pack's label, billed-to is management company or fund with the LPA clause quoted, period and amount are from the notice, offset is yes or no from the pack, and remaining fee is copied only when shown. It fails when you treat salary as a fund expense because the vendor billed the partnership, fold abort costs into this split, treat a fee waiver as billed-to, or invent an ILPA fee percent. Raziel's IRR calculator is a free money-weighted return tool. Feed dated cash only after you know which dollars were management-company overhead and which were fund expenses. Raziel does not give investment advice.