Question about HF Performance Fees
Hello everyone - I have a question for people with experience in the HF industry. How are performance fees/carry paid at hedge funds?
In PE at least ones with a European carry structure you get paid at the end of the fund life and draw mgmt fees from the total fund size. But in HF - assuming zero mgmt fee - I have a couple of questions:
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When is carry paid? end of every year?
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How is carry paid? assuming fund is fully invested, do you unwind positions to pay carry? do you just roll over the carry into the fund and adjust positions? etc.
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What happens if you pay carry in a year and then have a down year the following one? is there a claw back or so?
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Is carry usually a straight 20% over a fixed hurdle? or a waterfall?
bump
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