> 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/core-concepts/fees.md).

# Fees

A fund can charge three fees, all configured by the [admin](/funds/infrastructure/core-concepts/roles-and-operators.md) and all paid as **newly minted (or transferred) shares** to the fund's **fee receiver** (the Manager Safe). 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, annualized |
| **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 realized 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. 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/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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