Friday, July 22, 2011

Origin of 2+20

According to my friend in the pub last night, the familiar "2+20" fee model of hedge funds can be traced back to over 3000 years to Phoenician boat captains.



Records show that they would take a fifth of the profits from any successful voyage they made when transporting cargo around the Mediterranean. When Alfred Winslow Jones set up the first ever hedge fund in 1949, he decided this was the perfect fee model to emulate. Apparently.

I've done some cursory research and found some corroborating evidence in this article in the WSJ. However, it could just be echo. What do you think?

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