A 2 plus 20 fee structure for a hedge fund means that the fund:
A) takes 2% of any returns over 20%.
B) charges 2% of AUM and takes 20 percent of profits.
C) charges a 2% load and a 20% management fee.
D) charges a 20% load and a 2% management fee.

Question

Quizplus · Accepted Answer

A "2 plus 20" fee structure means the hedge fund charges a 2% management fee on assets under management (AUM) and takes 20% of the profits as a performance fee.

A 2 Plus 20 Fee Structure for a Hedge Fund