Question
A $200m hedge fund charges fees of 1.5-20 (and has 0.4% in other annual expenses), and launches with $190m in LP capital. The GP takes
A $200m hedge fund charges fees of 1.5-20 (and has 0.4% in other annual expenses), and launches with $190m in LP capital. The GP takes the management fees out of the Fund and leaves the incentive fees in the Fund, and the Fund earns gross returns of 12.1%, 14.3%, and 5.4% over the next three years, respectively.
a. Assume there are no additions or redemptions to the Fund. How big is it after three years?
b. What are total LP profits?
c. What are the total management and incentive fees collected by the GP?
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
9th Canadian Edition, Volume 2
470964731, 978-0470964736, 978-0470161012
