In the hedge fund world, the phrase "2 + 20" remains at least a critical point in discussion of fees, even though there has been a lot of erosion over the years, and it isn't clear how much of the industry still gets away with actually charging 2 + 20. The idea is that the management takes 2% of the assets it has under management [AUM] regardless of performance, and separately takes 20% of the profit it makes for its investors. The 20% incentive fee never goes below zero. That is, managers don't have to make up for the fund's losses, they simply get a chunk of gains when there are gains/ The 20% is the big money (at least in good times), while the 2% management fee keeps the lights on and the staff busily employed even in bad times. The 20% also means that, in the hedge fund world, there is a lot of talk about getting back to a "high water mark," but I'll ignore that today. The structure has come under pressure for a number of reasons. As lon...