Buying private equity funds through brokers, banks, or other channels typically involves the following fee structure: 1% subscription fee, 2% management or sales fee, and 20% performance fee on the backend.

For example, with a 1 million investment. Just the entry fee costs 10,000. Suppose after one year, the fund's net value increases by 20%, showing a gain of 200,000 on paper. But how much can you actually take home? Only 160,000. The actual return rate is less than 15% (1.16 million divided by 1.01 million equals 14.85%).

Doing the math makes it clear—out of this 1 million investment, the private equity fund has collected a total of 70,000 in fees from you. Of that, 10,000 is the subscription fee, 20,000 is management and sales fees, and the remaining 40,000 is the performance fee. It sounds quite intimidating, but this is also the industry-standard approach in the market.