Which of the following is correct regarding the compensation paid to private equity fund managers?
A)Managers typically receive 20 percent of fund profits but no separate management fee.
B)Managers typically receive a high percentage management fee but no portion of fund profits.
C)Management compensation is usually subject to a clawback provision to limit the performance fees.
D)"Carried interest" refers to the interest fund managers earn on performance fees.
E)Fees paid to fund managers do not reduce the net return of the fund.

Question

Quizplus · Accepted Answer

Management compensation in private equity often includes a clawback provision to ensure that managers do not receive excessive performance fees if the fund underperforms in the long term.

Which of the Following Is Correct Regarding the Compensation Paid