What fee structure do most hedge funds adopt?
Hedge funds fee structures vary, dependant on jurisdiction, domicile and, most importantly, investor base. The most common fee structure is the standard “1 and 20”: a 1% management fee (% of assets) and 20% performance fee (% of profits), annually (Normally the management fee is collected in .25% quarterly trenches, in advance, and the performance fee is calculated annually). In addition to this, there are other performance-related restrictions and expansions on the collection of fees: high-water marks and hurdle rates being the most common.
