Direct Deal vs Fund Comparison Calculator
Compare the same investment made directly and through a fund with management fees and carried interest, and see how much of the return each route leaves with your family. Free, no login, and nothing you type leaves your browser.
How the Calculator Works
Both routes buy the same asset with the same gross return. The fund route pays a yearly management fee and carried interest on profit above a compounding hurdle, using the same method as our IRR and MOIC calculator. The direct route pays your own legal and diligence costs up front and a yearly monitoring cost, which is what a family office spends to do the work itself.
The gap is the price of the manager's work. It is worth paying when the manager finds deals you never would. It is the reason so many families build direct teams, covered in why family offices prefer direct investments.
Assumptions and Sources
- Example sponsor terms of 1% at funding and 1% a year thereafter show how fees add up. Source: The Single Family Office, by Richard C. Wilson
- Same gross return on both routes, whole-year cash flows, carry over a compounding hurdle with no catch-up. Source: Family Office Club calculation method
Questions About This Calculator
Is direct always cheaper?
On fees, usually. But a direct deal also needs people, time and diligence skill, and it concentrates risk in one company. Compare the cost of building that capability with the fees saved.
Why does the fund route trail even at the same gross return?
Fees come out every year and carry takes a share of the upside, so less capital compounds for you.
Informational only, not financial, legal or tax advice. Confirm figures with your own advisors.