2 and 20

"2 and 20" is the traditional hedge fund fee structure: a 2% annual management fee on assets and a 20% performance fee on profits. Many funds now charge less, and emerging managers commonly launch below it to attract early capital.

The management fee pays for running the business; the performance fee rewards results. Both are set in the fund's offering documents and calculated by the administrator. Institutional pressure has pushed average fees to roughly 1.4% and 16% [industry estimate: cite a source before publishing], with founders share classes and hurdle rates used to sweeten early tickets.

Allocators evaluate fees net: what matters is the return after all fund-level costs, not the headline rate.

Why this matters for POD

Managers on POD set their own management and performance fees. POD's platform economics are separate and scale with the fund rather than charging fixed minimums.

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Fees & Liquidity

Management fee
The fixed annual fee paid to the manager as a percentage of net assets, charged whether or not the fund makes money.
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Performance fee
The manager's share of profits, typically 20%, charged above a high-water mark and crystallised at set intervals.
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Founders share class
A reduced-fee share class for investors who commit before a fund reaches a set size or date.
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POD is regulated as a fund administrator by the Central Bank of Ireland and as a fund manager in the BVI. Nothing on this site constitutes an offer to sell, or a solicitation of an offer to buy, any security or interest in any fund. Investment involves risk, including the possible loss of capital. Past performance is not a reliable indicator of future results.