You have to give Carl Icahn credit: He is making the most of the current ardor for hedge funds. The combative financier is apparently raising a hedge fund, but his won’t be any run-of-the-mill thing. Instead, he is raising $3-billion fund and will charge investors 2.5/20 — 2.5% of assets and 20% of the performance upside.
Is that so unusual? Well, while the 20% is normal, 2.5% is high, especially for a fund of this size. After all, 2.5% of $3-billion is $75-million — not bad money for just showing up. And it gets better: He is warning people that he will go to 3/30 for new investors who come in after the fund has opened. Yoicks!