We provide evidence that investment fees vary within private equity funds. Net-of-fee return clustering suggests that 70% of funds group investors into two fee-tiers that vary along both fixed and variable components. Managers of venture capital funds and those with high past performance are less likely to tier their investors. Some investors consistently earn higher net-of-fee returns relative to others within their funds. Investor size, experience, and past performance explain some but not all of this effect, suggesting that unobserved traits like negotiation skill or bargaining power materially impact the fees investors pay in private equity.
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