Two And Twenty

See: Carry.

It's the fee structure of most hedge funds (and private equity and venture capital and other hybrid funds). That means it's a 2 percent fee, usually assessed monthly on assets under management. That is, 2 percent of the total. And it's 20 percent of the profits left over, that get paid to the General Partners via the Limited Partners' investment in the fund.

The fee structure is so common, it's referred to just by the numbers. Yes, some venture funds get 2 and 30. And most lesser funds get 1 and 10 or so. But 2 and 20 was pretty standard for a long time for hedge funds. And that's a whole lot more expensive than the 0.3% index funds (i.e. 0.3% fee and no carry). Hedge fund performance had better be pretty amazing to warrant those massive fees (and it usually isn't).