Accessing Private Markets: What Does it Cost?

38 Pages Posted: 22 Dec 2022 Last revised: 26 Sep 2023

See all articles by Wayne Lim

Wayne Lim

Harvard University; University of Oxford

Date Written: June 15, 2023


This paper provides the first empirical analysis of the costs of financial intermediation across private markets. I access a proprietary dataset, develop a novel model, and estimate that it costs investors $0.05 to $0.26 per dollar committed over funds’ lifetimes. The corresponding fee drag on gross-to-net TVPI is 0.1x to 0.7x and 5% to 8% in annualized terms. The results demonstrate cost economies of scale in which larger funds cost less in management fees. Finally, the fraction of costs attributable to non-performance fees is 53% to 75%, raising questions if current fee structures effectively incentivize performance.

Keywords: fees, incentives, compensation, private markets, private equity, asset management, financial intermediation

JEL Classification: G11, G17, G23, G24

Suggested Citation

Lim, Wayne, Accessing Private Markets: What Does it Cost? (June 15, 2023). Available at SSRN: or

Wayne Lim (Contact Author)

Harvard University ( email )

University of Oxford ( email )

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