Management fee

In the investment advisory industry, a management fee is a periodic payment that is paid by an investment fund to the fund's investment adviser for investment and portfolio management services. Often, the fee covers not only investment advisory services, but administrative services as well. Usually, the fee is calculated as a percentage of assets under management. In the investment advisory industry, a management fee is a periodic payment that is paid by an investment fund to the fund's investment adviser for investment and portfolio management services. Often, the fee covers not only investment advisory services, but administrative services as well. Usually, the fee is calculated as a percentage of assets under management. In a mutual fund, the management fee will include any fees payable to the fund's investment adviser or its affiliates, and administrative fees payable to the investment adviser that are not included in the 'Other Expenses' category. Management fees paid to mutual funds and other registered investment companies are set forth in the advisory agreement which must be approved by the fund's board and shareholders; in general, these fees are heavily regulated under the Investment Company Act of 1940. In a private equity fund, the management fee is an annual payment made by the limited partners in the fund to the fund's manager (e.g., the private equity firm) to pay for the private equity firm's investment operations.