Ok, I’m confused about a question in the CFA textbook (chapter 74 number 12) about hedge fund fees. Fund has $2 billion in assets. Base fee 1 percent, incentive fee 20 percent over high water, which is $2.1 billion. Calculate fees if fund returns 29%. My question: why is base fee (according to the answers) calculated off the $2 billion in assets, not the end of year asset figure of $2.58 billion? Thanks all 
Base fees are management fees, charged regardless of how well the fund does.
Start of the year is Base - $2M End of year is when performance is calculated allowing the manager to take the incentive fee - 20% of $0.58B
ok so base fees are always calculated off the assets at the start of the period not the end? thanks heaps for the help spreads and quantjock, much appreciated…