Hedge Funds
In a hedge fund, the management fee is calculated as a percentage of the fund's net asset value (the total of the investors' capital accounts) at the time when the fee becomes payable. Management fees typically range from 1% to 4% per annum, with 2% being the standard figure. Therefore, if a fund has $1 billion of assets at year-end and charges a 2% management fee, the management fee will be $20 million. Management fees are usually expressed as an annual percentage but both calculated and paid monthly (or sometimes quarterly or weekly) at annualized rates.
Read more about this topic: Management Fee
Famous quotes containing the word hedge:
“Take the instant way,
For honor travels in a strait so narrow,
Where one but goes abreast. Keep then the path,
For emulation hath a thousand sons
That one by one pursue. If you give way,
Or hedge aside from the direct forthright,
Like to an entered tide, they all rush by
And leave you hindmost.”
—William Shakespeare (1564–1616)