Solution-Find the incentive fee for the managers of hedge

Find the incentive fee for the managers of hedge fund

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Reference no: EM133110709

Hedge Fund ABC has a 2 and 20 fee arrangement with no hurdle rate and a net asset value (NAV) of $300 million at the start of the year. At the end of the year, before fees, the NAV is $335 million.

a) Assuming that management fees are computed on start-of-year NAVs and are distributed annually at the end of the year, and that the fund had no redemptions or subscriptions during the year, find the annual management fee.

b) Find the incentive fee for the managers of hedge fund ABC.

c) Find ABC's ending NAV after fees.

d) Suppose that at the end of the year, before fees, NAV was $277 million instead of the original $335 million. Calculate the new annual management fee, incentive fee, and ending NAV after fees for hedge fund ABC

Reference no: EM133110709

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Find the incentive fee for the managers of hedge fund

Reference no: EM133110709

Reference no: EM133110709

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