Performance Fees

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August 31, 2024 4 min read Definitions

Performance Fees: Understanding Incentive-based Charges in Investment Management

Finance Investments Economics Performance Fees Incentive Fees Hedge Funds Investment Management Benchmarks

Performance fees are a type of fee structure where the compensation depends on the fund's ability to generate returns above a predetermined benchmark or hurdle rate. This article explores the concept, historical context, types, key events, formulas, applicability, examples, and related terms.

August 25, 2024 3 min read Definitions

Two and Twenty: Hedge Fund Manager Compensation

Finance Investments Hedge Funds Compensation Management Fees Performance Fees Investment Management

The 'Two and Twenty' fee structure is a common compensation model for hedge fund managers, where 2% of total asset value is charged as a management fee and an additional 20% of profits is taken as a performance fee.