What are the top FoHFs and how do they charge HFs?

Fund of funds don't charge hedge funds per se-they charge a fee structure to THEIR investors (aka limited partners or LPs), and they in turn are the LPs and PAY fees to hedge funds that do the direct management.

This can be structured as a higher nominal fee (say 3 & 25) or it can be stated as something, say 1 & 10, net of the underlying HF's fees-net impact to the FOF LP doesn't really change.

In practice FOFs also try to "extract" something from the HFs by negotiating lower fees because they can write large checks (same as other large investors like pension funds do).

The rationale for investing in FOFs (not saying I agree with these/they're worth it): a) Outsourced manager selection-instead of picking 10 good HF managers you pick one good FOF manager b) Access to managers you may not otherwise be able to get your money into (prestigious/gated funds) c) Diversify your HF exposure (by manager or strategy or whatever)-if you're a small institution for example you may not want to put the minimum $5mm investment in 10 different funds, so you can put $25mm in one FOF instead. d) Leverage the combined scale of the FOF to get better terms from the HFs