WebThe high-water mark clause of a hedge fund states that the fund manager first has to recover losses before he can charge a performance fee on new profits. High-water mark clauses are a common element in the fee … WebAug 4, 2024 · Hedge funds are sort of like mutual funds for the ultra-wealthy—they pool the money of their clients (mostly institutional and accredited investors) and then invest it in a variety of securities ...

Hedge Fund Terms Explained In English - Investment Cache

WebA hedge fund has the following fee structure: Annual management fee based on year-end AUM 2% Incentive fee 20% Hurdle rate before incentive fee collection starts4% Current high-water mark$610 million . Q. The fund has a value of $583.1 million at the beginning of the year. After one year, it has a value of $642 million before fees. WebThe term “high water mark” refers to the peak value the investment fund achieved from its inception to the latest reporting date. The terminology is frequently used in fund … brachytricha ornamental grass

High Water Mark How to Find High Water Mark with Examples?

A high-water mark is the highest peak in value that an investment fund or account has reached. This term is often used in the context of fund manager compensation, which is performance-based. The high-water mark ensures the manager does not get paid large sums for poor performance. If the manager loses … See more A high-water mark ensures that investors do not have to pay performance fees for poor performance, but, more importantly, guarantees that … See more For example, assume an investor is invested in a hedge fund that charges a 20% performance fee, which is quite typical in the industry. … See more Several things can happen when an investor enters a fund during a period of under-performance. For instance, at Goldman Sachs Asset … See more The high-water mark prevents this "double fee" from occurring. With a high-water mark in place, all gains from $460,000 to $575,000 are … See more WebSep 27, 2013 · Firstly, the term high water mark is used in reference with the fees that are paid for the manager of a hedge fund. It represents the biggest value reached by a hedge … WebMar 3, 2024 · A high watermark may be applicable to the performance fee; it specifies that the fund manager will only be paid a percentage of profits if the fund's net value exceeds its previous highest... brachyurophis campbelli