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Basic Question 1 of 15
A hedge fund manager is required to achieve a minimum investment performance before he may receive any incentive allocation. This is called:
B. Hurdle rate.
C. Lock up rate.
A. High water mark.
B. Hurdle rate.
C. Lock up rate.
User Contributed Comments 4
| User | Comment |
|---|---|
| johntan1979 | High-water mark definition: The highest peak in value that an investment fund/account has reached The high-water mark ensures that the manager does not get paid large sums for poor performance. So if the manager loses money over a period, he or she must get the fund above the high watermark before receiving a performance bonus. |
| lockwoju | Perhaps revise the gender biased "he" to the gender neutral "the fund manager". |
| ashish100 | Perhaps get some reading glasses @lockwoju #fail |
| 923029 | Does this exclude new money coming into the fund? |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe investment ownership and compensation structures commonly used in alternative investments
CFA® 2025 Level I Curriculum, Volume 5, Module 1.