Remember 2&20? Probably only too well. As most of the wealthy, private clients of asset management funds know, this was the base rate many were charged for the privilege of handing over their money.
There were variations on the 2&20 theme, but the general principle was to hit clients up for two per cent of the net asset value of the investment, plus 20 per cent of the returns above a pre-determined benchmark such as Libor. The "performance fee" was fixed on both realised and unrealised or paper gains, and most of it went in bonuses.