What is the standard fee structure for a hedge fund?

Traditionally, hedge funds have employed a ‘Two and Twenty’ (2/20) fee structure which consists of a 2% management fee and a 20% performance fee. However, in recent years hedge fund managers have come under sustained pressure to cut headline fees and employ more sophisticated fee structures. Nowadays, hedge fund managers commonly employ more complex structures, incorporating concepts such as ‘high-water mark’, ‘equalisation’, and ‘hurdle rates’ into their fee structures.