New Fund Performance Fee Structure

Quote from govttrader:

i talked with my investor, and he made some very logical points about incentives that i had not thought about. we decided on a flat 20%.

perhaps in a year if i perform well, i'll start a capital raising and work thru this issue with new investors...but for a 1st investor, i can't argue with a flat 20% performance / incentive fee.
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We've been capital raising for a while.. We run a hybrid hedge with additional signal services.

For SMA's
we offer 20% perf 3% management fees on anything less than X dollars
then a 17% perf 3% management fee on anything over that x dollar amount

With lock in and significant deposit 250k or more we offer 15% perf 2% management fee inside the fund.

I found this does a couple of things... keep non-accredited investors out of the fund and as customer of signal replication

It also offers incentives for larger accounts

And lastly it offers incentives to lock in big money into the hedge side.

Also we settle yearly
 
The OP's original structure would not be considered legal, and anything over 20% just isn't allowed in my state.

High water marks are required unless there's hedge fund limited partnership paperwork involved through compliant trading.

Only performance fees of accredited investors may be charged, and only if they have $1 million of liquid assets.

I've gone to the IB master account for some of my trading and it's a good thing I did, because I'm very happy with them.
 
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