AUM-Based vs Flat Fee Fund Administration

Most fund administrators charge a percentage of assets under management. That model was built for mega-funds — and it punishes emerging managers for growing. Here's why flat-fee pricing is better for micro VCs.

The Problem with AUM-Based Pricing

You're Penalized for Performance

When your portfolio appreciates, your admin fees go up — even though the work stays the same. A

5M fund that grows to $50M in NAV sees its admin fees double. You're literally paying more because you're doing your job well.

Hidden Minimums & Fees

Most AUM-based admins advertise 5–10 bps but enforce

5,000+ annual minimums. For a

0M fund, that's 25 bps — five times the headline rate. Add setup fees, per-investor charges, and report fees, and costs balloon quickly.

Unpredictable Budgeting

When your admin costs fluctuate with NAV, you can't predict expenses for your LPs. This makes your management fee budget unreliable and creates uncomfortable conversations when admin costs eat into fund economics.

Misaligned Incentives

Your admin benefits when your fund gets bigger. But the operational work of administering a 20-company, 15-LP fund doesn't change based on whether the NAV is

0M or $80M. You shouldn't pay more for the same service.

The Flat Fee Advantage

Predictable Costs

$5,000/fund/year. Period. No surprises, no escalators, no hidden fees. Budget with confidence.

Aligned Incentives

Your admin costs don't increase when your portfolio performs well. You keep the upside — that's the whole point.

Transparent for LPs

Show your LPs exactly what fund admin costs in your PPM. No asterisks, no "up to" language, no variable ranges.

Scales with You

Launch Fund I at

0M, grow to

00M by Fund III. Your per-fund admin cost stays the same.

More Carry in Your Pocket

Over a 10-year fund life, flat pricing can save you $450K+ vs. AUM-based alternatives — and up to $360K in additional carry.

Side-by-Side: $50M Fund Over 10 Years

AUM-Based Admin

Annual fee (10 bps)$50,000
10-year total$500,000
Setup fees$5,000+
Per-investor surchargesVaries
Estimated total$505,000+

Abax Flat Fee

Annual fee$5,000
10-year total$50,000
Setup fees$0
Per-investor surcharges$0
Total$50,000

Illustrative — $50M fund, 10 bps, 10 years: lifetime savings $455,000 · projected increase in carry $364,000