> For the complete documentation index, see [llms.txt](https://docs.kpk.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.kpk.io/funds/infrastructure/architecture/core-concepts/fees.md).
# Fees
The three fees a fund can charge, management, performance (high-water mark), and redemption.
A fund can charge three fees, all configured by the [admin](/funds/infrastructure/architecture/core-concepts/roles-and-operators.md) and all paid as **newly minted (or transferred) shares** to the fund's **fee receiver**, an address set by the admin. On KPK's Funds today that is the KPK Fee Recipient Safe, `0x9F230218cf7FDe6A9246e6f8CB0b888377E92639`, on Ethereum and Robinhood Chain. Every rate is expressed in **basis points** and capped at **2000 bps (20%)**.
| Fee | When it is charged | Base |
| --------------- | ------------------------------------------------------------- | ---------------------------- |
| **Management** | During request settlement, time-based | Net share supply, annualised |
| **Performance** | During request settlement, on gains above the high-water mark | Net share supply |
| **Redemption** | On each approved redemption | The shares being redeemed |
Throughout, **net supply** means `totalSupply - feeReceiverBalance`; the fee receiver's own shares are excluded so fees don't compound on themselves.
## Management fee
Accrues continuously and is realised when `processRequests` runs, provided at least **`MIN_TIME_ELAPSED` (6 hours)** have passed since the last management-fee update:
```
managementFee = netSupply * managementFeeRate * timeElapsed / (10_000 * 365 days)
```
The elapsed time is tracked with a single timestamp shared across all assets, so the fee is charged once per settlement window regardless of which asset is being processed.
## Performance fee (high-water mark)
Computed by a pluggable module, `WatermarkFee`, and only charged when the share price rises **above the highest price previously seen** (the *high-water mark*). It is evaluated during settlement when the processed asset has `isFeeModuleAsset = true` and a module is configured.
```solidity
function calculatePerformanceFee(
uint256 sharesPrice, // current price, 8-decimal USD
uint256 timeElapsed,
uint256 feePct, // performanceFeeRate, bps
uint256 netSupply
) external returns (uint256 fee);
```
Logic:
* If `sharesPrice ≤ highWatermark`, the fee is **0**, no profit above the mark.
* Otherwise the watermark is raised to the current price and the fee is taken on the profit since the previous mark:
```
profitPerShare = highWatermark - previousWatermark
totalProfit = profitPerShare * netSupply / highWatermark
performanceFee = totalProfit * feePct / 10_000
```
Because the mark only ever moves up, a draw-down must be fully recovered before any new performance fee is charged.
When the performance fee is charged (illustrative).
Swapping the module (or disabling it with \`address(0)\`) is an admin action; the base asset is flagged \`isFeeModuleAsset = true\` at deployment so performance fees can be computed for it.
## Redemption fee
Taken in shares on every approved redemption, before the remaining shares are burned:
```
redemptionFee = sharesRedeemed * redemptionFeeRate / 10_000
```
The fee shares go to the fee receiver; the net shares are burned and the corresponding assets are paid to the receiver. See [Redemptions](/funds/infrastructure/architecture/core-concepts/redemptions.md).
## Events
When management and/or performance fees are charged, the contract emits a single event (only if at least one is non-zero):
```solidity
event FeeCollection(uint256 managementFee, uint256 performanceFee);
```
The redemption fee is reported in the `RedemptionApproval` event's `redemptionFee` field. Rate changes emit `ManagementFeeRateUpdate` / `PerformanceFeeRateUpdate` / `RedemptionFeeRateUpdate` **only when the value actually changes**, and any fee accrued under the old rate is charged before the new rate takes effect.
---
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