Incentive Fee

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Dictionary Says

Definition of 'Incentive Fee'

A fee paid to a fund manager by investors. Incentive fees are typically dependent upon the manager's performance over a given period and are usually taken in relation to a benchmark index. For instance, a fund manager may receive an incentive fee if his or her fund outperforms the S&P 500 Index over a calendar year, and may increase as the level of outperformance grows.
Investopedia Says

Investopedia explains 'Incentive Fee'

Incentive fees are usually in place to tie a manager's compensation to their level of performance, more specifically their level of financial return. However, such fees can sometime lead to increased levels of risk taking, as managers attempt to increase incentive levels through riskier ventures than outlined in a fund's prospectus.
Search results for

'Incentive Fee'

  • Hedge Funds: Structures | Investopedia

    http://www.investopedia.com/university/hedge-fund/structures.asp
    ... Incentive Fee Most if not all hedge funds charge an incentive fee of anywhere between
    10-20% of fund profits, and some hedge funds have even gone as high as 50 ...

  • Fee-Based Brokerage: Will They Work For You?

    http://www.investopedia.com/articles/05/feebasedregs.asp
    ... This no-trade-no-fee approach provides a powerful incentive for brokers to
    get investors to trade, which encourages boiler room tactics. ...

  • Wrap Accounts: A Gift Of Advice?

    http://www.investopedia.com/articles/pf/05/042705.asp
    ... This no-trade-no-fee approach provided a powerful incentive for brokers to get
    investors to trade, which encourages boiler room tactics and churning. ...

  • Series 7 Study Guide - Customer Accounts - Costs And Fees ...

    http://www.investopedia.com/exam-guide/series-7/customer-accounts/costs-and-fees.asp
    ... would be “two and twenty,” which means that the hedge fund manager charges the investor
    2% of assets under management and 20% incentive fee, collected only ...

  • Hedge Fund Due Diligence

    http://www.investopedia.com/articles/mutualfunds/09/hedge-fund-due-diligence.asp
    ... Fee Terms The industry norm is "two and 20". That means a fund charges 2% of assets
    under management (management fee) and 20% of the profits (incentive fee). ...

  • Professionals - Careers | Investopedia

    http://www.investopedia.com/professionals/careers/
    ... Investment Counsel Association Of America - ICAA. Read More »; Incentive Fee. Read
    More »; Certified Credit Executive - CCE. Read More »; Efficiency Variance. ...

  • Professionals - Careers | Investopedia

    http://www.investopedia.com/professionals/Careers
    ... Investment Counsel Association Of America - ICAA. Read More »; Incentive Fee. Read
    More »; Certified Credit Executive - CCE. Read More »; Efficiency Variance. ...

  • Riding The Cycle With Weatherford

    http://stocks.investopedia.com/stock-analysis/2008/Riding-The-Cycle-With-Weatherford-WFT-NOV-BHI-OIH1023.aspx
    ... In their feverish quest for 2-and-20 (that is, a 2% base fee and a 20%
    performance-based incentive fee), hedgehogs are quick to chase the latest hot sector ...

  • A Brief History Of The Hedge Fund

    http://www.investopedia.com/articles/mutualfund/05/HedgeFundHist.asp
    ... investment vehicle, converting it from a general partnership to a limited partnership
    and adding a 20% incentive fee as compensation for the managing partner. ...

  • Should Value Investors Check Into Marriott?

    http://stocks.investopedia.com/stock-analysis/2011/Should-Value-Investors-Check-Into-Marriott--MAR-DIS-HOT-WYN-IHG-HMIN1011.aspx
    ... Business in China is different (there's a different incentive fee structure than
    is common in the US), and there is arguably more growth potential today, in ...

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