Remuneration of a fund raiser for hedge fund/fund?
If someone brings money to a hedge fund, how does he/she get remunerated for it?
Is it a percentage of the amount, a percentage of the generated fees from the funds brought?
Is it a one-time fee or annual?
What if the hedge fund then use this connection to raise more money?
Thanks!!
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about 1 year ago
Yes the fund raiser gets only a one-time fee, which is a percentage of the funds raised. The amount is negotiated between the fund manager and the fund raiser and is generally in the 5-10% range. What if the hedge fund then raises more funds directly from that source? Not illegal and unless there is a provision for compensation on future contributions in the above mentioned contract between the fund manager and the fund raiser, the latter is simply out of luck.
BTW, by law, the fund raiser must either be a licensed securities broker or an employee of the fund.