High Water Mark & Hedge Fund Bonuses

The hedge fund format is a great business model. You collect a 1-2% fee on the money under management ostensibly to pay for office expenses. Although when you’re running a billion dollars or more.....you can do the math. Then you collect 20% of the profits generated each year, your so-called performance fee or carried interest (in venture and private equity parlance). Most funds require that partners keep the bulk of their net worth in the fund at start-up (although, like anything else, exception[...]

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[Source: The Money Blogs]