Consider a hedge fund whose annual fee structure has a fixed fee and an incentive fee with

Question:

Consider a hedge fund whose annual fee structure has a fixed fee and an incentive fee with a high-water mark provision. The fund manager earns an incentive fee only if the fund is above the high-water mark of the maximum value since the inception of the fund. Discuss the positive and negative implications of the high-water mark provision for the investors of the hedge fund.
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...