Hedge Fund Fee Question

CFA Level I
#1

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This question tested from Session 18, Reading 66, LOS f.

I thought “Net of Fees” means ‘after fees’ or ‘after fees are deducted’…

can someone clarify it for me?

#2

tae,

I think where you might be confused is that Mgmt and Incentive fees are discrete. You must back out both after they have been calculated, spearately. Net return is then calculated based on net of fees (mgmt plus incentive). It’s just a labeling issue from there…

Net returns ARE net of fees.

#3

manaf,

Thanks for your reply and clarification.