What types of fees and expenses should be excluded from committed capital, for determining the limit on non-qualifying investments for VCFMs?
last revised on 12 October 2021
The fees and expenses to be excluded from committed capital refer to fund-level fees and expenses (such as management fees, fund setup costs and administrative fees). Investment-related expenses, which are attributed to specific deals, should not be deducted from the total committed capital, for the purpose of determining the limit on non-qualifying investments.
After deducting fund-level fees and expenses from total committed capital at the final close of the fund, 20% of the remainder represents the amount that can be applied towards non-qualifying investments.
For example, if a fund has total committed capital of S$100 million at the final close, and S$10 million is set aside for set-up costs and management fees, the limit on non-qualifying investments would be S$18 million (20% of S$90 million).