2-and-20

The traditional hedge fund fee structure: a 2% annual management fee on total assets plus a 20% performance fee on profits. Popularized in the 1990s and 2000s during the hedge fund boom, this model made managers like George Soros and Ray Dalio extraordinarily wealthy. Fee pressure from index funds and disappointing returns have pushed many funds toward lower structures, but the top-performing shops still command premium fees.