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Thread: Private Investment Fees

  1. #1
    P2F2 Member
    Join Date
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    Minnesota
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    Private Investment Fees

    The Arizona State Retirement System (ASRS) is required by legislature to disclose aggregate investment fees for private market investments, including management fees and performance fees. Currently, we obtain fee information from capital statements and ILPA templates filled out by GPs.

    Our question for P2F2 members is: Does your organization disclose any of the highlighted expenses/fee offsets shown in the attached document as Other Investment Fees in CAFR? Your sharing is greatly appreciated.



    Hong Mayhew, CPA
    Arizona State Retirement System
    3300 N Central Ave, Phoenix, AZ 85012
    Phone: 602-308-5177, Email: hongm@azasrs.gov
    Attached Images Attached Images

  2. #2
    P2F2 Member
    Join Date
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    Location
    Minnesota
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    Hi Hong,

    Please see South Carolina Retirement System’s response below. If you have any further questions on this topic, don’t hesitate to call or email me.

    Thanks—Andrew


    • We report Management Fees, Performance Fees (Carry), and Other Expenses.
    o Management fees are both invoiced and netted.
    o Management fees are reported net of all offsets and waivers.
    o Performance fees (carry) include both realized and accrued.
    o Other expenses (partnership expenses: audit, legal, organization, etc.) – does not include interest expense.
    • We report the fees & expenses provided to us by the managers (we do not calculate or recalculate fees & expenses).
    o We collect fee information quarterly from managers via standard template (ILPA template if manager can provide).
    o We check information for reasonableness using validation spreadsheets customized for each fund.
    o Our Administrator performs the collection and validation for us.
    o Our Investment Teams provide a final sanity check before numbers are published.
    • We report fees and expenses in our CAFR and Annual Investment Report. We have a statutory requirement to report fees on a fiscal year basis.

    Andrew Chernick | Chief Operating Officer
    S.C. Retirement System Investment Commission
    p 803.737.6083 | f 803.737.7070 | AChernick@rsic.sc.gov
    1201 Main Street | Suite 1510 | Columbia SC 29201

  3. #3
    P2F2 Member
    Join Date
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    Location
    Minnesota
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    Hi Hong:

    The Teacher Retirement System of Texas reports aggregate investment fees for private market investments in the investment section of our CAFR, including management fees and performance fees. We do not include the partnership expenses or offset details that you highlighted in your note to Dave.

    We report Accrued Management Fees (Net of offsets and Rebates) and Paid Performance Fees/Carried interest broken out by asset class as identified in our Investment Policy and by fee type (Fees invoiced and expensed fees paid from the trust fund and Fees netted against return taken out of our NAV by a GP)

    Our fee table is on page 130 of our 2017 CAFR.

    Let me know if you have any further questions.

    Thanks.

    Scot Leith | Director of Investment Accounting | Teacher Retirement System of Texas
    1000 Red River St., Austin, TX 78701-2698 | Phone 512-542-6630| scot.leith@trs.texas.gov

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