Understanding Hedge Fund Fees: Implications for Hedge Fund Managers

A GENERAL FRAMEWORK Partnership accounting provides for perfectly equitable allocations of Performance Fees (however calculated) among investors, as each investor has its own capital account and the Performance Fee is calculated based on each investor's individual investment experience in the Fund - irrespective of how many different times an investor makes capital contributions to the Fund. Series accounting - whether single or monthly series - calculates Performance Fees equitably with respect to each investment, but not with respect to each investor. klgates.com K&L GATES 20 20

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