What Is a Typical Fee Structure For a Hedge Fund?
Hedge fund investors typically pay a management fee and some form of performance compensation (generally structured as a partnership allocation in a domestic fund). The management fee is paid either monthly or quarterly and generally ranges form 1% to 2% of the funds assets under management on an annual basis. Performance compensation is paid either quarterly or annually in an amount equal to 20% of the fund s realized and unrealized net capital appreciation (subject to a “high water mark”).
