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As a hedge fund manager of $1 billion of assets, you charge a management fee of 2% and an incentive fee of 20% of returns
As a hedge fund manager of $1 billion of assets, you charge a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 7.2%. Evaluate the fee structure for your clients, both in dollars and as a percent of assets under management, for various portfolio returns as below: Portfolio ratdncentive fdncentive fedtotal fedotal fee of return (%) (%) ($ millionys million) %) a. -5 b. 0 C. 5 d. 10
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