One newer fee structure to emerge on the endowment side is the 1-or-30 structure, which tries to incentivize managers when they outperform, but also allows mana

One newer fee structure to emerge on the endowment side is the 1-or-30 structure, which tries to incentivize managers when they outperform, but also allows managers to keep the lights in an underperforming period. https://www.institutionalinvestor.com/article/b1505qmcspbw8p/new-fee-structure-offers-hope-to-besieged-hedge-funds https://www.institutionalinvestor.com/article/b1505qmcspbw8p... On the retail side, I'm sure using incentive fees is compelling to some potential clients. However, from a compliance perspective, offering a performance-based fee is thought to be operationally difficult. Incentive fee structures with high watermarks or hurdles are not trivial to calculate or grasp. As recently as the 80's, I believe incentive fee structures were outright illegal to offer to non-qualified investors. This is why fees typically are a percentage of assets.