Here's an amusing little article putting things in perspective
 

Well the money that the fund managers get is called a "Performance Fee" which is a percentage of the change (hopefully increase) of the Net Asset Value. Mangers only get the big bucks if their fun has significant increases in the Net Asset Value. In other words, if the manager is good at his or her job.

Paying someone based on their performance is a good thing.

I don't see any problems with linking the bonuses of a fund manager to the performance of the fund. I, personally, think that all senior executives of all businesses should have their salary/bonuses linked to the performance of their business.

So if a fund manager gets a $1,000,000,000 bonus and the performance fee is 20% of the delta NAV, that means that this manager was able to increase the net value of the investment by $5,000,000,000. This performance fee is only the business of the investors who belong to that fund. If they agree to pay their manager 20% of the increase of the NAV, that's their choice.

If you want a good manager, you will have to pay more for the performance.

By the way, not all hedge funds make money. The reason these funds are exempt from the "normal" regulations is because the investors are assuming all the risk. If you invest in a hedge fund and the manager gets caught being tricky, as far as the government is concerned you are SOL. It is between you and the manager. Don't come crying to the SEC. That is one of the risks of hedge funds and why only people who can really afford to lose a lot of money should risk it.

Leopold evidently has some agenda and he is trying to use some almost clever emotional misrepresentation. He is just not very good at it. :nope: