Higher Threshold for Performance Fee Proposed Under current SEC Rule 205-3, an SEC registered investment adviser can charge a performance fee (also called a performance allocation, incentive fee or incentive allocation) only to those investors who either has: a $1.5M net worth or at least $750,000 in assets with the [...]
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Posts Tagged ‘ performance fee ’
Revising the Hedge Fund Compensation Structure
Syndicated Post on Hedge Fund Fees I have recently come across a very good blog called Ten Seconds Into the Future by Bryan Goh of First Avenue Partners, a hedge fund seeder. Bryan’s posts are very insightful and I recommend all managers take a look at his writings. The post [...]
Hedge Fund Taxation – Law School Professor Perspective
Overview of Hedge Fund Taxation The following is a reprint of the Joseph Bankman’s testimony before Congress. Mr. Bankman is a professor at Stanford Law School. While the testimony has a bias against the current hedge fund taxation structure, it provides a great overview of hedge fund tax issue, specifically [...]
Hedge Fund Comments/ Questions and Answers
Questions and discussions from Hedge Fund Law Blog readers I get quite a few questions from readers and usually I am able to answer these questions via email within a couple of days. If you have any questions, comments or simply want more information on starting a hedge fund, please [...]
Hedge Fund Performance Fee Issues for State Registered Investment Advisors
One of the problems with the securities laws in the United States is that there are two levels of rules to be cognizant of at any single time – the federal rules and the state level rules. For hedge fund managers that are registered as investment advisors with the SEC, [...]
Hedge Fund Performance Fees
The hedge fund performance fee (also known as the “performance allocation,” the “incentive allocation,” the “incentive fee,” among other aliases), is a periodic fee which is calculated as a percentage of any gains of a hedge fund over a predetermined period of time. The fee is normally taken on both [...]
Hedge fund high watermark
Question: What is the hedge fund high watermark? Answer: The hedge fund high watermark is a mechanism that is implemented to make sure that managers do not take a performance fee when the fund has had negative performance over previous performance fee periods. The high watermark is the colloquial term [...]