An Equitable Structure for Hedge Fund Incentive Fees
There are a variety of problems in fee structures between hedge fund managers and their clients. Examples here illustrate issues such as the free rider problem and the “claw-back” syndrome that can arise in fee contracts. A different “equalization” process that is both equitable and transparent to investors would involve multiportfolios that give any fund a structure similar to that of a partnership organization, and overcomes the current drawbacks in contracts. Application of this structure should improve fund manager and investor compatibility.
Performance Fee, Equalisation, Hedge Funds, Free-rider, Clawback, Alernative Investment, Multi-porfolio Approach
Finance and Financial Management
Journal of Investing
Institutional Investor Inc
LEE, David K. C.; LWI, Steven; and PHOON, Kok Fai.
An Equitable Structure for Hedge Fund Incentive Fees. (2004). Journal of Investing. 13, (3), 31-43. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/3362