Hedge Fund Fees
Hedge Fund Fees Overview
Hedge fund fees are generally higher than other investment products. This is due to the hands-on professional money managers who are usually investing on a performance basis. Most hedge funds charge a base charge on total assets such as 2% and also a performance fee of say 20%. This mean that if the fun grows by 100%, 20% of the profits you would have realized comes back ot the hedge fund in the form of fees. This encourages them to bring in the largest returns possible for their investors. Fund of hedge funds combine different hedge fund strategies into a single portfolio. They usually add another 1-2% of fees on top of the embedded hedge fund fees but these rates are coming down lately due to competition.
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