[Verse 1]
The hedge fund world's got pricing schemes
Two percent and twenty's what it means
Management fee takes its annual slice
Whether markets soar or tumble twice
Base fee charged on assets every year
Performance bonus when the gains appear
[Chorus]
Management and incentive, that's the double take
High-water marks prevent the fake
Hurdle rates must clear the bar
Clawback clauses travel far
Two plus twenty, industry standard way
Fees that fund managers display
[Verse 2]
High-water mark's your safety net design
Prevents the manager from double-dipping wine
If fund drops down then climbs back up
No incentive fee fills their cup
Until it beats the previous peak
Protection for the fees you seek
[Chorus]
Management and incentive, that's the double take
High-water marks prevent the fake
Hurdle rates must clear the bar
Clawback clauses travel far
Two plus twenty, industry standard way
Fees that fund managers display
[Verse 3]
Hurdle rate's the minimum return required
Before incentive fees get fired
Eight percent might be the threshold line
Below that mark, no bonus shine
Risk-free rate plus premium spread
Ensures you're fairly compensated
[Bridge]
Clawback provisions guard against
The overpaid when losses commenced
If future years show negative trends
The excess bonus payment ends
Returned to investors from before
Balancing the fee rapport
[Chorus]
Management and incentive, that's the double take
High-water marks prevent the fake
Hurdle rates must clear the bar
Clawback clauses travel far
Two plus twenty, industry standard way
Fees that fund managers display
[Outro]
Fee structures built with checks in place
Alignment keeps the proper pace
Investors and managers both win
When fee arrangements discipline