Hey hi everyone,
Suppose a hedge fund uses a “2 and 20” fee policy, here is the 2% calculated on the initial AUM or the final AUM?
The book says it is the begining of the year AUM. But is it not counter intuitive? I would rather have the 2 % on the end of the year AUM.
You can take the average AUM for the calculation. I think that will be the best choice to avoid any confusion.You can pls elaborate more in the question to get better answer . Can you pls provide some more information.
All the questions I’ve come across tells whether the 2% is charged on beginning or ending values.
The question will always specify whether it’s based on the beginning or ending. That is a key component of getting the correct answer so make sure to note the wording of the specific question.