EquityMultiple presents all fees in full transparency within the Investor Documents of each investment offering. Note that all target and realized returns stated in EquityMultiple materials is net of all fees.
Investor Fees & Expenses
EquityMultiple charges an annual servicing fee to investors on all investments, typically 1% of invested capital. This fee compensates EquityMultiple for ongoing asset management, reporting, record keeping, tax preparation, distribution administration, and other services it provides throughout the life of each investment.
For certain investments, most commonly equity investments, EquityMultiple is entitled to a percentage of investor profits after investors receive full return of invested principal. Profit sharing helps align EquityMultiple’s incentives with investors – when investments perform well, both investors and EquityMultiple earn more. This incentivizes both a rigorous selection process and ongoing asset management.
There are certain expenses associated with investment administration, including annual tax preparation, entity formation and annual filings. EquityMultiple seeks to minimize these expenses and charges a small flat annual per investment amount – typically $30 – to provide greater predictability.
Sponsor Fees and Expenses
In addition to the investors fees and expenses described above, EquityMultiple typically earns upfront origination or placement fees. These are typically paid by the Sponsor/Borrower from the proceeds of the investment and are treated as expenses of the transaction. Placement fees are paid to Growth Capital Services, a registered broker-dealer. These fees compensate EquityMultiple for the work involved with sourcing, screening and structuring investments, as well as finding investors to participate.
Should you have any questions regarding the fees associated with any given EquityMultiple offering as you are reviewing investor documents, please don’t hesitate to reach out via the chat window at the bottom right-hand corner of your browser, or at firstname.lastname@example.org.