How are hedge fund managers compensated?
How managers are paid is as diverse as hedge funds themselves. However, managers typically charge a management fee of 2 percent, but are often (sometimes preferably) rewarded for how well they execute the fund objectives and the achievements of fund performance. In some scenarios a hedge fund manager can receive 20 percent or more of the fund’s gains, so long as the fund achieves a certain return goal first. If a hedge fund manager believes in his performance/product the manager will usually invest their own money in the fund — a further reward for positive performance. Web Reference: more about “How are hedge fund managers compensated?” Back to Questions • Who is eligible to invest in hedge funds? Hedge funds are not public offerings, therefore there are general restrictions on who can invest. Traditional hedge funds are open to wealthy investors; generally those who have at least $1 to $5 million in liquid net worth. Further restrictions may sometimes include a minimum investment th
