Transaction fee

In private equity, a fee charged by the sponsor, manager or an affiliate to a portfolio company for arranging a transaction. It may be a negotiated fixed amount or a percentage of transaction value, and is distinct from third-party advisor costs. Whether and how it offsets the fund’s management fee depends on the fund documents.

In this course, “deal fees” means the outside closing costs a buyer pays, such as Tamna’s US$5m. The sponsor’s own fee is the GP transaction fee.

Source: ILPA Principles: investor best-practice guidance, not universal fund terms.