What is the average performance fee for a hedge fund in Australia?

A) $ 6 \% $
B) $ 10 \% $
C) $ 14 \% $
D) $ 18 \% $

Question

What is the average performance fee for a hedge fund in Australia?

A) $ 6 \% $
B) $ 10 \% $
C) $ 14 \% $
D) $ 18 \% $

Quizplus · Accepted Answer

Hedge funds are well known for their high fee levels,certainly in comparison to standard funds.Fees are often set as a combination of administrative (or management)fees that are applied to each dollar of the overall portfolio,which averages around 125 basis points (or 1.25%),plus performance fees,which reward the manager if the fund performs above agreed benchmarks,which are also known as the hurdle rate.The performance fee is also referred to as an incentive fee,as it is designed to provide incentives to the fund manager to outperform.Do,Faff and Wickramanayake (2005)report that in Australia management fees average 1.3%,while performance fees average 14.0%.

What Is the Average Performance Fee for a Hedge Fund 6% 6 \% 6%

What Is the Average Performance Fee for a Hedge Fund $6 \%$