Before recommending any private-market fund, walk these seven questions in order. Each maps to a layer or a channel decision. If you cannot answer one from the fund’s own documents, that gap is itself the finding.
What is the base management fee, and on what base?
Net assets, gross assets, or committed capital? Gross-asset bases reward the manager for adding leverage. (Layer 1)
What is the performance fee, and is it in the stated expense ratio?
Carry or incentive fee, the hurdle, and the catch-up. If it is excluded from the expense ratio and from AFFE — as it usually is — add it back mentally. (Layer 1)
What do “Other Expenses” and AFFE add?
Especially important for young funds and funds-of-funds, where Layer 2 can dwarf the management fee. (Layer 2)
Which share class, and what does it cost to distribute?
Upfront load or placement fee, plus the annual servicing / distribution trail. Default a fee-based client to the no-load Class I. (Layer 3)
Direct or through a platform — and if a platform, what does the feeder add?
Obtain the feeder’s own fee table. Is there an added management fee? An added carry? Is the manager paying the platform for shelf space? (Layer 3)
How much of the total expense is really interest on leverage?
Strip Layer 4 out before comparing two funds on cost, or you will penalize the unlevered fund for being honest. (Layer 4)
What is the true liquidity mechanism, and can it be gated?
Mandatory (interval) or discretionary (tender-offer, non-traded BDC)? What is the early-repurchase deduction? Liquidity you cannot use in a stress event is not liquidity.
Access is not synonymous with quality, and a low headline is not a low cost. The advisor’s edge is no longer getting into the fund — it is knowing, to the basis point, what getting in will cost the client, and being able to defend that number.