An Equitable Structure for Hedge Fund Incentive Fees

• Main Authors: LEE, David K. C., LWI, Steven, PHOON, Kok Fai
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: Performance Fee; Equalisation; Hedge Funds; Free-rider; Clawback; Alernative Investment; Multi-porfolio Approach; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3362; https://doi.org/10.3905/joi.2004.434549
• Institution: Singapore Management University

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 i...