If an investment management firm is known to be a two and twenty shop, this implies that the firm receives an annual:

Question

Quizplus · Accepted Answer

A "two and twenty shop" is typically associated with hedge funds or private equity firms and refers to the firm charging a management fee of 2% on the assets under management (AUM) and receiving 20% of the profits, known as carried interest. Therefore, option A is the correct choice. Option B would imply that the firm only receives a 20% fee on AUM, which is not common practice. Option C and D refer to fees based on gross operating profits, which is not typically how fees are structured in a two and twenty shop.

If an Investment Management Firm Is Known to Be a Two