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Basic Question 4 of 15

Assume a "2 and 20" compensation structure with 8% hurdle rate and a catch-up clause. If the partnership is 6% this year,

I. LPs can require a clawback from GP.
II. LPs gets the entire 6%.
III. The management fee is always paid by the investor, regardless of profits.
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User Contributed Comments 1

User Comment
923029 Is that a net 6% after the management fee of 2% AUM is deducted? 8% - 2%?
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You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu

Learning Outcome Statements

describe investment ownership and compensation structures commonly used in alternative investments

CFA® 2025 Level I Curriculum, Volume 5, Module 1.