Hedge Fund Fees

To insure that a hedge fund stays as profitable as possible, the fund manager is paid via both a performance and management fee. These fees are closely associated with hedge funds, and are intended to incentivize the investment manager to produce the largest returns they can. This is because a typical hedge fund fee is “2 and 20", which refers to management fees of 2% and performance fees of 20%. These ratios are very different from those found on a public mutual fund.