3The Outer Limits: Hedge Fund Fees


Now we come at last to the crowning achievement of the fee-charging business, the pièce de résistance, the masters of the fee-charging universe—hedge funds.

Hedge funds, like mutual funds, are pools of commingled investments shared among multiple investors. The difference between mutual funds and hedge funds is that hedge funds must restrict the type and number of investors that invest in them. Investors must be wealthy enough to bear significant loss (they must own at least a million dollars in investment assets or have income of at least $200,000 a year). As long as a hedge fund adheres to the restrictions ...

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