Barely a year old, the Indian hedge fund sector is already experimenting with the global standard fee structure for such investment vehicles.
Hedge funds the world over typically charge a two per cent management fee and also take 20 per cent of any profits they make above a certain hurdle rate, the so called '2 and 20' model. Indian hedge funds are reworking this. Some take one per cent in fixed fees, others 1.5 per cent. Some are even willing to take zero per cent, according to sources. Their cut of the profits are also said to be 15 per cent in some cases and even 10 per cent in others.
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