Project Study: Designing Optimal Fee Structure Models for Energy Hedge Funds

Setting up fee structures for hedge fund managers that align the interests of hedge fund manager and the investor and are acceptable for both parties is a challenging task. Energy hedge funds trading power, oil, gas, and coal operate in a volatile environment and are often classified highly risky assets. Interesting questions in this regard are whether the subset of energy trading firms differ from the general multi-strategy hedge funds and whether there is an optimal fee structure for energy hedge funds?