Hedge fund fees- sharing in the losses and gains

[slkiel]

I was reading the attached interview with Walter and Edwin Schloss and Walter makes a reference to the fact that Ben Graham managed money for others before the depression where he took 50% of the gains and shared in 50% of the losses. Obviously when the depression hit, Graham was wiped out.

 

Leaving the part about Graham being wiped out aside, I've been wondering for years why there's not a single hedge fund I'm aware of that does this today. It's got to be one of the most fair ways to partner with your investors. Does anyone have any thoughts on this structure? Has anyone seen a fund like this?

 

I have a small fund with a typical fee structure (1 and 20 w/4% hurdle). I would think a 50/50 setup would garner some attention and at least a few investors. I may even be interested in launching something like this.

6.00JoeRosenfield2.pdf

[LC]

I read of a fund which reimburses historical incentive fees for poor performance. Unfortunately I can't recall the fund off the top of my head.