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Private Equity Fees Drop to Record Low Amid $507B Fundraising

1/6/2026

40 9 Full Breakdown

Summary

Story summary

In 2025, private equity firms charged an average management fee of 1.61%, the lowest on record amid fundraising challenges.
Despite fee compression, the industry raised $507 billion across 856 funds in the first three quarters of 2025, near 2024 levels.
Nearly 46% of capital came from the ten largest funds, which can lower fees by spreading fixed costs.
Preqin expects fee compression to persist as fund sizes grow.

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Story summary

In 2025, private equity firms charged an average management fee of 1.61%, the lowest on record amid fundraising challenges.
Despite fee compression, the industry raised $507 billion across 856 funds in the first three quarters of 2025, near 2024 levels.
Nearly 46% of capital came from the ten largest funds, which can lower fees by spreading fixed costs.
Preqin expects fee compression to persist as fund sizes grow.