Hedge Fund Terms – M

Management Fee – These are the fees taken by the fund manager on the entire investments asset level.

Master-Feeder Fund – A typical structure for a hedge fund. It involves a master trading vehicle that is placed offshore. The master fund has 2 investors: Another offshore fund, and a US (usually Delaware) Limited Partnership. These two funds are the feeder funds. Investors put money into the feeder funds and the feeder fund places all the money in the Master fund, which is traded by the manager.

Maximum Drawdown – The worst period of “peak to valley” performance for the fund, regardless of whether or not the drawdown consisted of consecutive months of negative performance.

Minimum Investment – The initial investment for the fund requires a minimum amount of money.

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