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Hello,
The correct answer is option B,
Management fee = $133 million × 0.02 = 2.66 . Incentive fee = (133 – $100) × 0.20 6.60 .Total underlying fund fees (2.66 + 6.60) million = 9.26 million.
Ash Lawn fees:
AUM at end of year, net of underlying fund fees = 133 million – 9.26 million = 123.74 million.
Ash Lawn management fee = 123.74 million × 0.01 = 1.24 million.
AUM net of underlying fund fees and Ash Lawn management fee = (123.74 – 1.24) million = 122.50 million
Ash Lawn incentive fee = ($122.50 – $100) million × 0.10 = $2.25 million
Total Ash Lawn fees = (1.24 + 2.25) million = 3.49 million.
Total fees of underlying funds and Ash Lawn:(9.26 + 3.49) million = 12.75 million.