What did your hedge fund fees actually cost you?
Your documents say 2 and 20. What you actually paid, across the years you were invested, is usually a different number — and almost nobody is ever shown it. Enter your figures below and we recompute it.
Nothing leaves your browser. No account, no upload, no document required. The arithmetic runs on your device.
Your capital account
Gross return, year by year
The figures below are an example. Replace them with your own.
Gross means before fees. If your statements only show net returns, use your best estimate — the comparison still holds.
Period by period
Why the rate you pay is not the rate in your documents
An incentive fee is charged when the fund is up. It is not refunded when the fund is down. A high-water mark stops you being charged twice for the same gain, but it does not return a fee that has already crystallised.
So two funds that deliver the same total return over the same years can charge you very different amounts. The one that got there in a straight line charges close to the stated rate. The one that got there through a series of gains and losses charges considerably more — with every dollar of it correctly calculated under the documents you signed.
This is not a claim that anyone did anything wrong
The gap comes from the shape of the contract, not from a mistake. Research on this — most prominently NBER working paper 27454 — found effective incentive fee rates across the industry running far above the headline rates, while every fee remained contractually correct. The point is not that someone erred. The point is that you were never shown the number.
Where a soft hurdle bites
A hard hurdle charges the incentive fee only on profit above the hurdle. A soft hurdle charges it on the entire profit once the hurdle is cleared. The difference at the boundary is large, and it is rarely explained. Switch the hurdle type above and watch the number move.
What this tool does not do
- It does not audit anything, and it is not an audit.
- It does not tell you whether to stay in a fund or leave one.
- It covers the fee mechanics you can recompute from your own documents. It cannot see expense allocation, master-feeder push-down, side pocket valuation, or equalisation adjustments — those live with the fund administrator, and no tool on your side of the table can reach them.