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Crystallized incentive fee on a hedge fund means that the incentive fee is frozen for a period of time. Instead of the fee going up or down, it crystallizes or freezes at a certain rate.
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Does a Hedge Fund Manager's incentive compensation get paid only if the profits are realized and not just increases in appraised values that are not yet realized?
Here's a summary of what Wikipedia says about hedge funds. There's a lot more on their page (linked to the left). A hedge fund generally refers to a relatively unregulated investment fund, often a partnership rather than a corporation in form, and characterized by unconventional strategies (i.e., strategies other than investing long only in bonds, equities or money markets). While most of today's hedge funds still trade stocks both long and short, many do not trade stocks at all. For U.S.-based managers and investors, hedge funds are simply structured as limited partnerships or limited liability companies. The hedge fund manager is the general partner or manager and the investors are the limited partners or members. The funds are pooled together in the partnership or company and the general partner or manager makes all the investment decisions based on the strategy it outlined in the offering documents. In return for managing these funds, the hedge fund manager will receive a management fee and an incentive fee, with the management fee being a fee computed as a percentage of assets under management and the incentive fee computed as a percentage of profits of a "high water mark". The fee structures of hedge funds vary but typically the management fee ranges from 1-2% of the assets under management and an incentive fee that is usually 20% of the profits of the fund and can include "hurdles" or other items. Certain highly regarded managers demand higher fees. For example, Steven Cohen's SAC Capital Management charges a 50% incentive fee (but no management fee) and Jim Simon's Renaissance Technologies Corp. charges a 5% management fee and a 44% incentive fee. Offshore hedge funds are usually domiciled in a tax haven and are designed for U.S.-based hedge fund managers to manage the assets of foreign investors and tax exempt U.S. investors. In this structure, the manager will receive a management and incentive fee and will also be invested in the fund as an investment manager. The typical hedge fund asset management firm includes both the domestic U.S. hedge fund and the offshore hedge fund. This allows hedge fund managers to attract capital from all over the world. Both funds will trade 'Pari passu' based on the strategy outlined in the offering documents.
What is hedge funds?
Well there are a couple of different ways you could define it... 1. (a flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging) 2. an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee too its investment manager . and more...
Meaning of Fee based and fund based financial services?
Fee based financial services charge a fee to the person using their services. Fund based financial services retained a certain portion of the equities purchased.
What is the definition of a no load mutual fund?
A no load mutual fund is a mutual fund that does not charge a commission or sales charge. This means that you don't have to pay a fee to invest or withdraw your money, and all of your money will go to work in the mutual fund. A no load mutual fund means that there is no or very low fee charge for the fund. These are typically lower than loaded mutual funds.
What is the Difference between internal service fund and enterprise fund?
Enterprise fund is a fee for service. Internal service fund is services from one department to another on a cost reimbursement basis.
Does a Hedge Fund Manager's incentive compensation get paid only if the profits are realized and not just increases in appraised values that are not yet realized?
Here's a summary of what Wikipedia says about hedge funds. There's a lot more on their page (linked to the left). A hedge fund generally refers to a relatively unregulated investment fund, often a partnership rather than a corporation in form, and characterized by unconventional strategies (i.e., strategies other than investing long only in bonds, equities or money markets). While most of today's hedge funds still trade stocks both long and short, many do not trade stocks at all. For U.S.-based managers and investors, hedge funds are simply structured as limited partnerships or limited liability companies. The hedge fund manager is the general partner or manager and the investors are the limited partners or members. The funds are pooled together in the partnership or company and the general partner or manager makes all the investment decisions based on the strategy it outlined in the offering documents. In return for managing these funds, the hedge fund manager will receive a management fee and an incentive fee, with the management fee being a fee computed as a percentage of assets under management and the incentive fee computed as a percentage of profits of a "high water mark". The fee structures of hedge funds vary but typically the management fee ranges from 1-2% of the assets under management and an incentive fee that is usually 20% of the profits of the fund and can include "hurdles" or other items. Certain highly regarded managers demand higher fees. For example, Steven Cohen's SAC Capital Management charges a 50% incentive fee (but no management fee) and Jim Simon's Renaissance Technologies Corp. charges a 5% management fee and a 44% incentive fee. Offshore hedge funds are usually domiciled in a tax haven and are designed for U.S.-based hedge fund managers to manage the assets of foreign investors and tax exempt U.S. investors. In this structure, the manager will receive a management and incentive fee and will also be invested in the fund as an investment manager. The typical hedge fund asset management firm includes both the domestic U.S. hedge fund and the offshore hedge fund. This allows hedge fund managers to attract capital from all over the world. Both funds will trade 'Pari passu' based on the strategy outlined in the offering documents.
What is hedge funds?
Well there are a couple of different ways you could define it... 1. (a flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging) 2. an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee too its investment manager . and more...
What is the definition of a hedge fund?
A private investment vehicle whose manager receives a significant portion of its compensation from incentive fees tied to the fund's performance -- typically 20% of annual gains over a certain hurdle rate, along with a management fee equal to 1% of assets. The funds, often organized as limited partnerships, typically invest on behalf of high-net-worth individuals and institutions. Their primary objective is often to preserve investors'capital by taking positions whose returns are not closely correlated to those of the broader financial markets. Such vehicles may employ leverage, short sales, a variety of derivatives and other hedging techniques to reduce risk and increase returns. The classic hedge-fund concept, a long/short investment strategy sometimes referred to as the Jones Model, was developed by Alfred Winslow Jones in 1949.
Meaning of Fee based and fund based financial services?
Fee based financial services charge a fee to the person using their services. Fund based financial services retained a certain portion of the equities purchased.
What is the difference between high water mark and hurdle rate?
A hurdle rate would be a minimum return required before a management incentive fee would kick in. An minimum requirement example might be LIBOR + or a Risk Free Rate, etc. A high water mark is the highest peak in value an investment fund has reached. High water marks are setup to ensure that high fees aren't paid for poor performance. In other words, if the manager loses a bunch of money, you don't pay a performance incentive fee until the fund is back up to the high water mark.
What is the definition of a no load mutual fund?
A no load mutual fund is a mutual fund that does not charge a commission or sales charge. This means that you don't have to pay a fee to invest or withdraw your money, and all of your money will go to work in the mutual fund. A no load mutual fund means that there is no or very low fee charge for the fund. These are typically lower than loaded mutual funds.
What is a non sufficient fund?
A bank fee for bouncing a check
What is the Difference between internal service fund and enterprise fund?
Enterprise fund is a fee for service. Internal service fund is services from one department to another on a cost reimbursement basis.
What is an asset management fee?
The Asset Management Company (AMC) as the Investment Manager of the Mutual Fund charges a fee for portfolio management. The fee charged on an annual basis is calculated as a percentage of net assets under management. Reliance Mutual Fund house charges nominal charges as compared to other fund houses.
What is a non load mutual fund?
A no-load mutual fund is one that does not charge a fee to investors. Many mutual funds have a "load" or initial fee, often around 5%, that investors must pay in order to buy in to the fund. No-load mutual funds lack this fee, and earn money for their managers in different ways. Most index funds are no-load funds.
What is the maximum fee that can be charged on a Debt Mutual Fund?
Type your answer here... 1.25%.
What are mutual fund loads?
Mutual fund loads are when you are charged for a purchase of shares/units. You are also charged an one time sale fee.
