Hedge Fund A holds several long equity positions and an equal dollar amount of offsetting short positions. The fund has a "1.5 and 15" fee structure, for management and performance fees respectively and, apart from the high-water mark requirement, there are no hurdle rates. The fund's management fees are calculated at the beginning of each period and are distributed annually. The performance fees are calculated at the end of each period, net of management fees. The fund's assets under management (AUM) are shown in the table below.

YEAR AUM (Millions) at year start before fees AUM (Millions) at year end before fees

2018 R135.6 R144.8

2019 R144.8 R140.5

2020 R140.5 R160.2

1.1 What hedge fund strategy is Hedge Fund A likely to be pursuing? (1)

1.2 Calculate the management and performance fees at the end of 2018. (2)

1.3 What is the high-water mark applicable for 2020? (3)

1.4 Calculate the management fee and performance fee for 2020. (2)

1.5 Calculate the net percentage return for the 2020 year. (Round off your answer to two (2) decimal places.) (2)

1.6 Assume a risk-free rate of 5.5%, and that another hedge fund following the same strategy has a Sharpe ratio of 1.8. Evaluate the performance of Hedge Fund A in 2020 in relation to the other fund, if Hedge Fund A's standard deviation of returns is 10%. (2)