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Is Two & Twenty A Reasonable Model Or Not?

IncSecvoltIncSecvolt Posts: 2
Critics of the model argue that it aligns the fund manager's interests with the fund's performance, allowing them to keep a significant portion of profits regardless of whether the returns are due to skill or luck.

The average hedge fund AUM, or assets under management, is significantly higher than the average AUM of traditional investment funds, leading to higher management fees for hedge fund investors.

Supporters argue that the 2 & 20 model is necessary to compensate a fund manager for the risk and expertise required to manage a hedge fund
Some argue the model is outdated and that hedge fund managers should be compensated based on their ability to add value rather than simply generating returns.


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