And while the last feature mentioned is true, it’s also true that PE investments usually generate substantial returns. Why? Because of all the strategic improvements and the active involvement. And last but not least, the high fees. Known as the “2 and 20” fee structure, PE funds often charge fees; 2% management fees, and 20% performance fees. Even if the comparison between the two will be very clear, remembering these features will help you understand what exactly differentiates private equity from private investment.