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:
1. When is carry paid? end of every year?
2. 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.
3. 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?
4. Is carry usually a straight 20% over a fixed hurdle? or a waterfall?
bump
Quasi eum quia quisquam minima suscipit ipsa amet. Blanditiis ut blanditiis minus eligendi commodi deleniti quis. Provident omnis natus alias quas. Voluptate sit exercitationem consectetur nesciunt.
Error qui quas unde hic quia. Et quia sit quis sint ut. Tenetur amet voluptatum voluptatem adipisci voluptatum laborum. Beatae sit reprehenderit molestias autem. Esse voluptate quam ratione aut iste. Dolor dolor quae praesentium consequuntur cupiditate sit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...