[Verse 1] When you invest in hedge funds, there's fees you need to know Management and incentive, that's how the money flows Two percent for management, they take it every year Whether profits rise or fall, this fee will always appear [Chorus] Two and twenty, that's the way Management fee and profit's pay High-water mark protects your ground Hurdle rate keeps fees sound Clawback provisions make it fair Hedge fund fees beyond compare [Verse 2] Incentive fees are different, they're based on how you win Twenty percent of profits when returns begin But there's a catch that helps you, called the high-water mark You only pay on new gains, not climbing from the dark [Chorus] Two and twenty, that's the way Management fee and profit's pay High-water mark protects your ground Hurdle rate keeps fees sound Clawback provisions make it fair Hedge fund fees beyond compare [Verse 3] The hurdle rate's your minimum, the bar you have to clear Before incentive fees kick in, this threshold must appear It might be risk-free rate plus more, or fixed percentage set Only profits past this point will catch the incentive net [Bridge] When managers take too much and later lose your cash Clawback provisions help you get your money from their stash They have to pay back excess fees from their previous gain It keeps the system balanced when performance turns to pain [Chorus] Two and twenty, that's the way Management fee and profit's pay High-water mark protects your ground Hurdle rate keeps fees sound Clawback provisions make it fair Hedge fund fees beyond compare [Outro] Understanding fee structures helps you make the call Management, incentive, protections, know them all Before you place your money in a hedge fund's care Make sure you know exactly what fee structure's there
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