Carried Interest and Management Fees
Historically, carried interest has served as the primary source of income for the manager and respective firm in both private equity and hedge funds. Both private equity firms and hedge funds tended to have a small annual management fee (1% to 2% of committed capital); the management fee is meant primarily to cover the costs of investing and managing the fund rather than for meaningful wealth creation for the manager.
As the sizes of both private equity and hedge funds have increased, management fees have become a more meaningful portion of the value proposition for fund managers as evidenced by the 2007 initial public offering of the Blackstone Group.
Read more about this topic: Carried Interest
Famous quotes containing the words carried, interest and/or management:
“Pregnant women! They had that weird frisson, an aura of magic that combined awkwardly with an earthy sense of duty. Mundane, because they were nothing unique on the suburban streets; ethereal because their attention was ever somewhere else. Whatever you said was trivial. And they had that preciousness which they imposed wherever they went, compelling attention, constantly reminding you that they carried the future inside, its contours already drawn, but veiled, private, an inner secret.”
—Ruth Morgan (1920–1978)
“It is the interest one takes in books that makes a library. And if a library have interest it is; if not, it isn’t.”
—Carolyn Wells (1862–1942)
“The management of fertility is one of the most important functions of adulthood.”
—Germaine Greer (b. 1939)