Assess Current Facts and Circumstances
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Internal Cost Expense Allocation
The Kroll team will help you test, evaluate, benchmark and support your fee and expense policies and procedures and will provide you with robust and defensible practices to mitigate risk.
Contact UsAdvisers to private funds are faced with growing scrutiny regarding internal allocations of fees and expenses. The SEC’s Office of Compliance Inspections and Examinations focuses its examinations on select areas, including advisors’ collection of fees, allocation of expenses, valuation and marketing practices. As a result, investors are now increasingly focused on fee and expense allocations and adequate disclosures.
Services Benchmarking
Review Fee and Expense Allocations
Documentation
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How We Can Help
- Evaluate the existing fee and expense allocation practices for:
- compliance with investor agreements and disclosure of documents
- consistency with robust and defensible best practices
- potential risks and exposures
- Help advisers develop or enhance fee and expense policies, procedures, and disclosures based on robust and defensible best practices
- Benchmark internally provided services that are charged to relevant funds to industry market rates
- Provide an assessment report on the private funds’ fee and expense allocation procedures and disclosures
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We can evaluate internal costs and perform benchmarking to establish market rates for internally provided services. While each engagement is bespoke, we apply the following steps.
For external expenses, Kroll ensures the costs are allocated appropriately across the relevant funds. Similarly, Kroll evaluates existing policies for external fees to ensure these procedures align with disclosures made to investors. Our projects can conclude with the deliverable of your choice, including formal documentation reports that can be provided to investors and/or regulators. |
Our Scope
We can evaluate internal costs and perform benchmarking to establish market rates for internally provided services. While each engagement is bespoke, we apply the following steps.
- Identify which internally provided services are being passed through to the funds.
- Review the fund documents and assess what is reasonable within industry standards.
- Ensure the fees for these services are allocated correctly.
- Perform a benchmarking analysis which uses a combination of market data and financial modeling to establish market rates for any type of internally provided service.
For external expenses, Kroll ensures the costs are allocated appropriately across the relevant funds.
Similarly, Kroll evaluates existing policies for external fees to ensure these procedures align with disclosures made to investors.
Our projects can conclude with the deliverable of your choice, including formal documentation reports that can be provided to investors and/or regulators.
Our Team
As former auditors, regulators, compliance executives, finance professionals, lawyers, economists and valuation professionals, our dedicated team is made up of recognized experts with strong technical background in the asset management industry. Our deep experience has proven essential in helping our clients with comprehensive solutions.
Our Team
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