1. A Singapore hedge fund was valued at S$400 million last year. At years end, the value before fees was S$480 million. The fund charges 2 and 20. Management fees calculate on end-of-year values. Incentive fees are independent of management fees and calculated using no hurdle rate. The previous year the funds net return was 2.5%. The annualized return for the last two years is closest to:

1. 13.6%.
2. 8.1%.
3. 7.9%.

2. A hedge fund started with an initial investment of 75 million. The end-of-year value after fees for Year 1 was 70 million. For Year 2, the end-of-year value before fees is 90 million. The fund has a 2 and 20 fee structure. Management fees pay independently of incentive fees and calculate on end-of-year values. Incentive fees calculate using a high water mark and a soft hurdle rate of 2%. Total fees paid for Year 2 are:

1. 4.4 million.
2. 5.8 million.
3. 4.8 million.

3. Summer field Fund of Funds invests in two hedge funds, DXS and REF funds. Summerfield initially invested $50.0 million in DXS and $100.0 million in REF. After one year, DXS and REF were valued at $55.5 million and $104.5 million, respectively, net of both hedge fund management fees and incentive fees. Summerfield Fund of Funds charges 1.0% management fee based on assets under management at the beginning of the year and a 10.0% incentive fee independent of management fees. The annual net return for Summerfield Fund of Funds is closest to:

1. 5.5%.
2. 6.0%.
3. 5.0%

4. An Australian hedge fund has a value of A$100 million at the beginning of the year. The fund charges a 2% management fee based on assets under management at the beginning of the year and a 20% incentive fee with a 10% hard hurdle rate. Incentive fees are calculated net of management fees. The value at the end of the year before fees is a$112 million. The net return to investors is closest to:

1. 8%.
2. 10%.
3. 9%.

5. Dalmatian Fund is a hedge fund with a value of 100 million at the beginning of the year. Dalmatian Fund charges 1.5% management fee based on assets under management at the end of the year and a 25% incentive fee with no hurdle rate. Incentive fees calculate independent of management fees. The funds value at the end of year before fees is 120 million. Compared to a 2 and 20 fee structure, Dalmatian Funds total fees for the year are:

1. higher.
2. lower.
3. the same.

6. A Pitcairne Islands hedge fund has a value of 100 million at the beginning of the year. The fund charges a 2% management fee based on assets under management at the end of the year and a 20% incentive fee with a soft hurdle rate of LIBOR + 2.5%. Incentive fees are calculated net of management fees. If the relevant LIBOR rate is 2.5% and the funds value at the end of the year before fees is 120 million, the net return to investors is closest to:

1. 17.6%.
2. 14.1%.
3. 16.5%.