Understanding Hedge Fund Fees: Implications for Hedge Fund Managers

K&L GATES FULCRUM FEES (CONT.) How is the fulcrum fee determined? Here's where it gets more complicated. Once a fund is at least a year old, we compare its performance to the performance of its index over a rolling 36- month period (or since inception for funds less than three years old), then adjust the basic fee up or down depending on how much the fund beat or lagged its benchmark. (Full details on these calculations are available in our Prospectus.) To rule out performance differences that might just be random, we do not make a performance adjustment when the fund's performance is within 3 percentage points of its index's performance. . . . . . . . ? klgates.com > > > 44

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