---
title: "Net vs Gross Returns | Altss Glossary"
description: "Gross returns are performance before fees/expenses; net returns are performance after all fees, carry, and costs borne by LPs."
canonical: "https://altss.com/glossary/net-vs-gross-returns"
---

Performance & Reporting

# Net vs Gross Returns

Publisher: Altss LLCPublished 2026-01-12Content modified 2026-01-12

Gross returns are performance before fees/expenses; net returns are performance after all fees, carry, and costs borne by LPs.

**Allocator relevance:** High — the net/gross gap reveals true fee burden, economics alignment, and whether performance is durable after costs.

**Expanded Definition**
“Gross” can mean deal-level gross, fund-level pre-fee, or pre-carry depending on manager convention—allocators require definitions. “Net” should reflect the LP experience after management fees, fund expenses, and carried interest. A large gap can be acceptable in certain high-touch strategies but must be justified by value creation and reporting transparency.
Allocators often request a net-to-gross bridge: how much return is attributable to management fees, carry, expenses, financing, and timing effects.

**Decision Authority & Governance**
Governance requires accurate disclosure of fee basis, step-downs, offsets, expense policy, carry calculation mechanics, and side letter economics. Allocators treat inconsistent definitions or missing bridges as a reporting red flag.

**Common Misconceptions**

- Gross is standardized and comparable across managers.

- Net equals gross minus management fee (carry/expenses matter).

- A small gap always means investor-friendly terms (performance level can distort).

**Key Takeaways**

- Demand explicit definitions for gross and net.

- Review the net/gross bridge as a diligence artifact.

- Fee mechanics can change outcomes as much as deal performance.

## Related terms

[Management Fee](https://altss.com/glossary/management-fee)[Carried Interest (Carry)](https://altss.com/glossary/carried-interest-carry)[Fee Drag](https://altss.com/glossary/fee-drag)

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