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The economics of hedge funds

This collaborative research examines the relationship between hedge fund managers’ fee structures and the amount of risk taken and among other things finds a “high-powered incentive fee” encourages excessive risk-taking, while management fees have the opposite effect.
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Hedge funds charge more than private equity

Fee comparison between hedge funds and private equity is riddled with complexity, but a research paper by specialist alternative consulting firm, Cliffwater – that weighs outcomes by their likelihood of occurrence – finds a fee cost for the typical hedge fund equals 32 per cent of gross profits, while for private equity it is 25 […]