What Is Fee model?

In quantitative finance, there are different models how traders, investors, strategy developers, funds and other stakeholders of the ecosystem are paid for their work.

There are several fee models

  • Management fee: the operator collects % of fees regularly regarless of profit and loss. E.g. with 2% management fee, 2% is collected every

  • Performance fee: the operator collects fees if an investor is in profit over crystallisation period.

  • Carried interest is uncollected fees for the operator.

  • Deposit and withdrawal fees. E.g. 0.5% is collected when an investor exits.

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