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Management fee is the cost of professional management of an investment fund by an investment manager. The management fee covers not only the salaries of managers, but also the cost of investor relations and any administrative costs. The remuneration structure is usually based on the percentage of assets under management (AUM); they tend to range from 0.10% to over 2% of the AUM. Gross Exposure
September 25, 2022 Total risk measures the overall risk of an investment fund in the financial markets, including long and short positions and leverage. 3(c)(7) Exemption
September 25, 2022 Exception 3(c)(7) pertains to a section of the Investment Company Act of the 1940s allowing qualifying private funds to be exempt from certain SEC rules. 3C1
September 25, 2022 3C1 refers to the part of the Investment Company Act of 1940 that exempts certain private equity firms from regulation.
– A firm to be defined as an investment company must comply with certain regulatory and reporting requirements set by the SEC. Activist Investor
September 25, 2022 Activist investors buy minority stakes in public companies to change the way they are run. Attribution Analysis
September 25, 2022 Attribution analysis is an evaluation tool used to explain and analyze the performance of a portfolio (or portfolio manager), especially when compared to a certain benchmark. Fund Manager
September 25, 2022 The fund manager is responsible for implementing the fund’s investment strategy and managing its trading activities. Fund of Funds (FOF)
September 25, 2022 A fund of funds (FOF) is a pooled fund that invests in other funds. Global Macro
September 25, 2022 The global macro strategy bases its assets on the economics and policies of various countries or their macroeconomic principles. Hedge Fund Manager
September 25, 2022 A hedge fund manager is a financial company or individual who hires professional portfolio managers and analysts to set up hedge funds. High-Water Mark
September 25, 2022 A high score is the highest level of value that an investment account or fund has reached. Institutional Investor
September 25, 2022 An institutional investor is a company or organization that invests money on behalf of clients or members. Liquid Alternatives
September 25, 2022 Liquid alternatives or liquid alternatives are alternative investment vehicles that aim to make them more accessible to retail investors. Lock-Up Period
September 25, 2022 Blocking periods are when investors cannot sell certain shares or securities. Long-Term Capital Management (LTCM)
September 25, 2022 Long-Term Capital Management (LTCM) was a large hedge fund run by Nobel Laureates in Economics and prominent Wall Street traders. Master-Feeder Structure
September 25, 2022 in the master-feeder structure, investment funds are formed from the capital of investors; these feeder funds in turn invest in a centralized master fund. Money Manager
September 25, 2022 A wealth manager is a person or financial firm that manages a portfolio of securities of individual or institutional investors. Net Exposure
September 25, 2022 Net risk is the difference between a hedge fund’s short and long positions, expressed as a percentage. Offshore
September 25, 2022 Offshore activity refers to any (business) activity that takes place outside the organization’s home base. Redemption
September 25, 2022 In finance, redemption means the redemption of a fixed income security, such as a Treasury bill, certificate of deposit, or bond, on or before the due date. Return of Capital (ROC)
September 25, 2022 Return of Capital (ROC) is a payment or income received from an investment that is not considered a taxable event and is not taxed as income. Two and Twenty
September 25, 2022 Two refers to a standard management fee of 2% of assets per year, and 20 means an incentive fee of 20% of profits above a certain threshold, known as the Threshold Rate. Window Dressing
September 25, 2022 Window dressing occurs when portfolio managers try to improve the performance of an investment before presenting it to investors or shareholders. Baltic Dry Index
September 25, 2022 The Baltic Dry Index (BDI) is an index of average prices paid for the transport of dry bulk materials on more than 20 routes. Bond Fund
September 25, 2022 A bond fund invests primarily in a portfolio of fixed income securities. Feeder Fund
September 25, 2022 A feeder fund is one of many small investment funds that pool investors’ money, which are then combined into a single centralized master fund.