Fund expense allocation with the LPA clause on every slice, and nothing the manager owes charged to a fund
Every invoice split with its LPA clause, and nothing the manager owes charged to a fund.
See one case, screen by screen ↓Fund expense allocation is splitting each vendor invoice between the funds, their parallel vehicles, the co-investors and the management company, as the LPAs, side letters and the firm's allocation policy say. In Fund Expense Allocation, seven agents read each invoice in any language and test every line against the fund documents. They split it with the clause on every slice and double-check the work. The fund accountant codes, the controller and fund CFO approve, and treasury pays.
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A private markets manager pays thousands of vendor invoices a year: law firms, auditors, administrators, appraisers, consultants, insurers. Every invoice has to be split between the funds, their parallel vehicles, the co-investors and the management company, exactly as the LPAs, the side letters and the firm's expense allocation policy say. Today a fund accountant reads the invoice, often a French, German or Japanese PDF. She decides from memory which clause applies, builds the split in a spreadsheet by commitments or NAV, and keys it into two systems. Approvals happen by email, and the engagement letter, deal memo and LPA clause sit in shared drives.
That split is where the SEC keeps finding money in the wrong place. Broken-deal costs stay on the fund instead of being shared with the co-investors who committed. Fundraising time for a successor fund hides inside a deal invoice. Seconded manager staff get billed through a consultant. A cap passes without anyone noticing. When an examiner asks for every expense allocated to Fund III and its co-investment vehicles, with the basis, rebuilding the spreadsheets takes weeks.
Estimated split for one multi-fund vendor invoice at a manager with 40 vehicles, by hand and with the solution.
Seven agents read, test, split and double-check every invoice; the accountant codes, the controller and CFO approve.
Project Heron was Fund III's proposed acquisition of Valcourt Instruments SAS in Lyon, with a co-investment vehicle formed for the deal. The deal broke when exclusivity lapsed on Sep 18, 2026. On Oct 12 the Paris firm Maison Duret Avocats sends its bill to Quillfield Capital: €184,500 in French. Here is what happens next, screen by screen, in the working solution.
Daniel's home shows 136 open invoices (about $6.05M across 40 vehicles) and 69 waiting for a person: 52 to code, 14 with the controller, 3 with him. It also shows $1.11M moved to the manager this quarter, and 2 caps or investor limits passed. Under “Needs you”, the Project Heron fees sit at the top with “Review and decide”. Beside them is what the agents did since yesterday, every line cited, and a box to ask them anything.
Checker agent: “Re-checked Project Heron after Tom Lindqvist’s approval: €12,000 of Fund IV fundraising time stays with the manager; it now waits for you.”
The Reader agent reads note d'honoraires MDA-2026-0937, two pages in French: five lines and €184,500.00 excluding VAT. The buyer self-assesses the VAT under the reverse charge. The agent matches the bill to engagement letter EL-2026-019 and confirms it is not a duplicate. Every English line points to its place on the page, so Sophie Marchand, who reads French, can check the translation line by line.
The Reader agent never guesses a value it cannot read. It hands the invoice to a person.
Lines 1, 2, 3 and 5 (€172,500) are broken-deal costs. The investment committee memo records that exclusivity ended Sep 18, and LPA §8.3(b) says the fund and the co-investors that committed bear such costs. Line 4 is 9.6 hours of “échanges avec des investisseurs potentiels du Fonds IV”: talks with prospective Fund IV investors. Fundraising for a successor fund is the manager's under §8.4(a), so the agent moves the €12,000 to the manager with reason code MM-01.
The Chargeability agent cites a clause for every line, or hands the line to a person.
The €172,500 is split by commitments to Project Heron, from deal allocation memo DAM-HER-03: Fund III's family $310.0M and Heron Co-Invest $190.0M of $500.0M. Fund III bears €106,950.00 and Heron Co-Invest €65,550.00, as its co-investment agreement §6.2 requires. Fund III's share runs across its parallels by commitments (§8.6): Delaware €76,392.86, Cayman €21,390.00, Lux €9,167.14. The manager's €12,000.00 slice is outlined on its own, and FX is €1 = $1.0842 at 4 p.m. London.
The Checker agent re-does the split from scratch and agrees to the cent. It argues the manager's side: no Quillfield staff time is billed, and the co-investors carry their full share, so the funds do not subsidize them. At about $200,034.90 the bill is above $50,000, so the fund CFO approves after the controller. Sophie codes it on Oct 13 with AP-03, because Maître Duret confirmed line 4 by email. Tom Lindqvist approves it on Oct 19 with AP-01 after checking the deal memo.
The Checker agent cannot approve, and any disagreement goes to a person.
Daniel asks the agents in plain words. The Allocation agent answers with its sources. Heron Co-Invest committed $190.0M of the $500.0M. Fund III's LPA shares broken-deal costs pro rata with any co-investment vehicle that committed, and the co-investors agreed to it in §6.2. If the funds paid it all, they would be subsidizing the co-investors.
Allocation agent: “If the funds paid it all, they would be subsidizing the co-investors; the SEC has fined advisers for exactly that.”
The approval shows every slice and its basis. The dialog reads: “You are the third person: coded by Sophie Marchand, approved by Tom Lindqvist.” Daniel picks AP-01, “Agree with the agents’ allocation”, and signs. The Posting agent then posts 5 journal entries, one for each of the 4 vehicles and one for the manager's share. It queues the payment to Maison Duret's verified bank account in Wednesday's run, which treasury releases.
“I approve this allocation as Daniel Price, Fund CFO, Private Markets. My approval is signed and time-stamped.”
Whitcombe & Rhys LLP bills $414,600 for Fund IV formation and second-close side letters. Fund IV has charged $2,708,400 of its $3,000,000 organizational cap. LPA §8.2(a) puts side letter negotiation and the MFN process inside the cap, so $123,000 goes to the manager. Under §8.2(b) that overage comes off the management fee in full. The agent drafts the advisory committee note, and it also tracks the Province of Westmark's side-letter expense limit in QIF II.
The Cap Monitor agent warns at 90% and never lets a fund pass a cap unseen.
Larkspur Events bills $38,900 for the annual investor meeting. The evening reception for prospective Fund IV investors ($6,400) is already the manager's. On the $32,500 venue line, the Checker agent counts 18 prospective Fund IV investors among 230 attendees and would move $2,543.48 to the manager. The Allocation agent would keep the line with the funds under the policy's LP-attendee basis. Approval is blocked until Tom sides with one of them, with a reason code.
“The agents disagree on line 1.” No contested fund expense allocation is settled by a machine.
The SEC's document request asks for every expense allocated to Fund III, its parallel funds and co-investment vehicles from Jan 1, 2025 to Sep 30, 2026, with the basis. The Evidence agent builds the pack: 1,906 invoices, each with its basis, clause and policy version, plus approvals and overrides, fund documents and the source invoices in their original language. It ties to the general ledger. Helen reviews it before anything leaves the firm.
The Evidence agent sends nothing outside the firm without the Chief Compliance Officer.
The same invoice, seen by five of the people who carry it: what their week looked like, and what it looks like now.
Seven agents read, test, split and double-check every invoice; the accountant codes, the controller and CFO approve.
Reads every vendor invoice in its own language and cites each value to its page: vendor, number, dates, lines, hours, tax and totals. It matches the vendor and engagement letter, finds duplicates by vendor, number and amount across 7 years, and reads LPAs and side letters into proposed terms for the Chief Compliance Officer to approve.
Tests every invoice line against the LPA, side letters and co-investment agreements. Each line comes out as an allowed fund expense, a broken-deal cost, a live-deal cost, an organizational expense, or the manager's.
Applies the expense allocation policy across parallel funds, co-investors and the manager. The basis is commitments, deal commitments, NAV for open-end funds, LP attendees or a fee schedule, and FX is the prior day's 4 p.m. London rate.
Re-does every allocation independently and argues the manager's side. It looks for seconded staff, fundraising time, co-investor shares, events for prospects and related parties.
Tracks organizational caps per close, annual caps and side-letter expense limits per investor, and projects them to year end. It moves any overage to the manager and drafts the advisory committee note.
Drafts journal entries for each vehicle and the manager, and builds the payment file only from approved invoices to verified bank accounts.
Builds the quarterly fund-borne expense report with its ILPA template lines, and the examiner and auditor packs, with every number traced to its invoice and tied to the ledger.
Maker, checker, above $50,000, release. The agents propose; a named person decides.
Ask in plain words, or tell the agents what to do. Every answer cites its clause or page, and nothing changes until a person approves it.
Why did €12,000 move to the manager?
Line 4 of Maison Duret’s bill is 9.6 hours of “échanges avec des investisseurs potentiels du Fonds IV”: talks with prospective Fund IV investors. Fund III’s LPA says the manager bears fundraising for a successor fund, so the funds and the Heron co-investors bear none of it. The Checker agent agreed independently.
Why do the co-investors pay 38%?
Because they committed $190.0M of the $500.0M to Project Heron. Fund III’s LPA shares broken-deal costs with any co-investment vehicle that committed, pro rata, and the co-investors agreed to it. If the funds paid it all, they would be subsidizing the co-investors.
Which caps are close?
Four. Two are passed. Fund IV organizational expenses pass the $3,000,000 cap with Whitcombe & Rhys, so $123,000 goes to the manager. The Province of Westmark’s side-letter limit in QIF II is reached, so €5,016.84 of its share of the Ortega Vidal bill goes to the manager. Two are close: QREP V will be at 91.6% of its annual cap after the Merrow valuations, and Fund III’s organizational cap closed at 96.5%.
Approve the Project Heron fees for me
I can’t approve on your behalf. Approvals above $50,000 are signed by you, the fund CFO, after Sophie Marchand coded it and Tom Lindqvist approved it. Everything you need is on one screen: the split by commitments, the €12,000 moved to the manager and the French original beside the English.
13 screens from the working solution, on its sample data. Pick one to see it large.
Thresholds, hand-offs and checks are settings. The administrator proposes a change. The fund controller approves thresholds, and the Chief Compliance Officer approves anything that changes who bears an expense.
| Setting | Default | Choose from |
|---|---|---|
| Fund CFO approval above | $50,000 USD equivalent | Policy §2.3 · USD at the 4 p.m. London rate of the prior business day |
| Bulk approval allowed for | $5,000 or less · confidence 97% or more · no exception | Policy §2.4 · a change to $7,500 waits for the fund controller |
| Second treasury releaser above | $1,000,000 per run | Treasury policy · the first releaser cannot make the second release |
| Hand to a person when an agent's confidence is below | 90% (Reader agent: 85% for a scanned page) | Agent governance |
| A line moves to the manager when | its clause excludes it, a cap or investor limit is reached, or a person moves it with a reason | Fund terms · reason codes MM-01 to MM-06 |
| Cap warnings | 90% to the controller · 100% to the fund CFO and the CCO | Cap Monitor agent |
| Duplicate check | vendor + invoice number + amount, any status, 7 years | Reader agent |
| Service levels | coded in 2 business days · controller in 3 · fund CFO in 2 | Escalation: controller, then fund CFO, then COO |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (SEC settlement with a real estate private equity adviser, August 2020: about $3 million of restitution and a $350,000 penalty; SEC settled action, June 2015: almost $30 million for misallocated broken-deal expenses; SEC press release 2022-107: more than $3.3 million repaid to a fund and a $1 million penalty). The ILPA Reporting Template is named as context only. People, firms, funds, vehicles, vendors, deals and investors named on this page are fictional: characters and sample data in the working solution.
Fund expense allocation is splitting each vendor invoice between the funds, their parallel vehicles, the co-investors and the management company, as the LPAs, side letters and the firm's allocation policy say. In Fund Expense Allocation, seven agents read each invoice in any language and test every line against the fund documents. They split it with the clause on every slice and double-check the work. The fund accountant codes, the controller and fund CFO approve, and treasury pays.
By commitments to the deal, when the fund documents say so. On the sample Project Heron bill, the Allocation agent splits €172,500 of broken-deal costs 62% to Fund III and 38% to Heron Co-Invest, from the deal allocation memo, citing the LPA and the co-investment agreement. The Checker agent re-does the split independently to make sure the funds do not subsidize the co-investors.
That depends on each fund's LPA and side letters, so the Chargeability agent tests every line against them and cites the clause. In the working solution, fundraising and marketing, placement fees, manager personnel and overhead go to the manager. So do overage above a cap or an investor's side-letter limit, and the manager's 30% share of the firm's insurance. Each carries a reason code.
The Cap Monitor agent tracks each organizational cap per close, each annual cap and each investor's side-letter expense limit, and projects them to year end. It warns at 90%. When an invoice would pass a cap, it moves the overage to the manager with the clause and drafts the advisory committee note.
Yes. The Reader agent reads each invoice in its own language and shows the original beside the English, with every value cited to its page. Amounts, dates and hours are copied from the page, not translated. If a value cannot be read, it does not guess: a person types it in, and the change is recorded.
The Evidence agent builds the quarterly fund-borne expense report by vehicle and ILPA category, with every number traced to approved invoices, and exports the ILPA template lines for the fund CFO to sign. For an examiner's document request, it builds a pack of every allocation with its basis, clause, policy version, approvals and source invoice, tied to the general ledger. The Chief Compliance Officer releases it.
Yes. The agents never code, approve, post unapproved or release a payment. Whoever codes an invoice cannot approve it, and nobody who codes or approves can release its payment. When two agents disagree, a person decides with a reason code, and every override is on the audit trail.
The Agentic Solution Engine builds and deploys it from your requirements and documents (your LPAs, side letters, allocation policy and a sample of past invoices). It goes live once every quality gate has passed. In the working solution's setup, the agents replay the last quarter before go-live and every difference is explained. We will walk you through it on your own invoices first.
Every NAV checked against your books before it goes out, with breaks held, not published.
1-min demoFund Administration OversightEvery administrator graded on its evidence, with the cause of each error found and fixed.
1-min demoManagement Fee CalculationEvery fee recalculated from its clause before billing, every gap explained and signed.
1-min demoWe'll run Fund Expense Allocation on a sample of your own invoices, LPAs and side letters.