What fund term length tells us about fees and governance

The strategic evolution of both infrastructure and private credit set the stage for 2026. Global infrastructure assets under management (AUM) is projected to approach $3tn by 2030F, according to Preqin’s Infrastructure in 2026 Global Report. This is supported by a 12.9% annualized growth rate, with Europe acting as the largest driver of this growth. Tailwinds for the asset class include a global digital infrastructure build-out, power generation requirements, and the revamp of some core infrastructure assets.

For private credit AUM, growth is forecast to accelerate, reaching $4.5tn by 2030F (with closed-end funds making up $3.1tn and semi-liquids the remaining $1.4tn), according to the Private Credit in 2026 Global Report.

While both infrastructure and private credit funds set their management fees with investor appeal in mind, the longer durations of infrastructure funds – excluding extensions – can lead to higher total management fee costs over the fund’s lifecycle. Additionally, the requirement for key persons¹ to devote ‘substantially all’ or a ‘majority of time’ to the fund are more demanding standards in infrastructure funds compared with private credit funds, due to these extended term lengths.

Fig. 1: Infrastructure funds have the longest average term length, excluding extensions
Average term length, excluding extensions, for infrastructure and private credit funds

_{Source: Preqin Term Intelligence. Data as of January 2026}

Preqin Term Intelligence data shows that infrastructure funds have an average term length of 11 years and nine months, highlighting the lengthy timelines typically needed for developing, managing, and achieving returns from large-scale infrastructure projects (Fig. 1). In comparison, private credit funds average eight years and six months, a shorter duration likely attributable to their potentially faster asset turnover and lower operational complexity relative to infrastructure and real estate funds.

Fig. 2: Average management fees for infrastructure funds are higher than private credit funds
Average management fees for infrastructure and private credit, inside and outside investment periods

_{Source: Preqin Term Intelligence. Data as of January 2026}

Private credit and infrastructure managers are pricing their management fees to attract investors. The average management fee for infrastructure inside the investment period is 1.49% and for private credit is 1.43% (Fig. 2). Preqin Term Intelligence data indicates that in contrast, the average management fee rate for private equity funds inside the investment period is 1.82%. Outside the investment period, the average management fees are 1.43% and 1.35% for infrastructure and private credit funds, respectively. While the average management fee rates for infrastructure funds are higher compared with private credit funds, the overall fee burden for investors in infrastructure assets may be increased by longer term lengths. For private equity funds, the average management fee outside the investment period is 1.67%, according to Preqin Term Intelligence.

Fig. 3: Actively invested capital is the primary fee basis post investment period
Management basis for infrastructure and private credit funds inside and outside the investment period, by percentage of funds

_{Source: Preqin Term Intelligence. Data as of January 2026}

Notably, private credit funds – owing to traditionally lower operational demands and faster asset turnover – more commonly use actively invested capital as the management fee basis during the investment period (Fig. 3). In contrast, 71% of infrastructure funds use initial commitments as the basis for their management fees during the same period. By tying management fees to committed capital, fund managers could potentially secure a more predictable and steady revenue stream to support fund management and oversight throughout the fund’s extended lifecycle. This approach provides potential stability regardless of the timing of capital deployment or asset divestment. Outside the investment period, however, both private credit and infrastructure funds primarily base their management fees on actively invested capital.

Fig. 4: ‘Substantially all’ and ‘majority of time’ are generally the highest key person time and attention standards in LPAs
‘Substantially all’ and ‘majority of time’ as time and attention standards for key persons during the investment period for private credit and infrastructure funds, by percentage of funds

_{Source: Preqin Term Intelligence. Data as of January 2026}

Within limited partnership agreements (LPAs), there are significant variances in the drafting around time and attention standards that a key person is required to dedicate to a fund. This includes references to ‘substantially all’, ‘majority of time’, ‘consistent with partnership objectives’, and ‘active involvement’.

‘Substantially all’ and ‘majority of time’ are generally the highest standards. These heightened standards help ensure robust governance and potentially more consistency in fund performance, but also increase potential risk and workload for key individuals, particularly if unforeseen circumstances affect their availability during the fund’s extended lifecycle. Preqin Term Intelligence data shows that 80% of infrastructure funds require their key persons to devote ‘substantially all’ or a ‘majority of time’ to fund operations inside the investment period, compared with 69% in private credit funds (Fig. 4).

The higher time and attention standards for key persons in infrastructure funds are more rigorous primarily because these funds typically have longer fund terms, excluding extensions, than private credit funds. This prolonged commitment means that key persons must consistently provide oversight, strategic direction, and hands-on management over many years, rather than just during a shorter, more intensive phase.

Additionally, the complexity and scale of infrastructure projects – such as transportation networks, energy facilities, and utilities – demand sustained operational involvement. The assets often require active management, regulatory navigation, and ongoing stakeholder engagement, which further intensifies the demands placed on key persons. In contrast, private credit funds generally deal with assets that have quicker turnover and require less continuous oversight, potentially allowing for lower time commitments from key individuals.

Why understanding fee and term variations across asset classes matters

Understanding how management fees and key person provisions differ across asset classes is essential for both investors and fund managers. As infrastructure and private credit fund terms continue to evolve, access to reliable data on fee structures and governance expectations becomes increasingly important.

For fund managers, benchmarking their fee models – such as whether to base management fees on committed capital or actively invested capital – against market standards is crucial for maintaining competitiveness, especially as investors demand greater transparency and exert more bargaining power.

For investors, having insight into prevailing terms can help them negotiate fair agreements and safeguard their interests, particularly regarding key person provisions that need significant time commitments over lengthier fund lifecycles. Legal teams facilitating negotiations can also benefit from a comprehensive understanding of current market practices.

As infrastructure and private credit continue to attract investor interest, robust and timely data on fee and governance terms is vital for fostering effective governance, aligning expectations, and supporting long-term partnership success in the private markets landscape. Learn more about Term Intelligence.

_{1 A key person is an individual whose ongoing involvement and expertise are considered essential to the management and performance of a fund. Typically, these are senior investment professionals named specifically in the limited partnership agreement (LPA).}

_{The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}