# kaal:claim:2714974-037

**Claim.** The prohibition on performance fees for investment companies is the most important structural difference from hedge funds, which rely heavily on performance fees of up to 20 percent of capital gains and appreciation to give advisers incentives to produce absolute returns.

**Type.** mechanism  **Support.** argued

**Holds when.**

- applies to advisers to registered investment companies

**Source quote.**

> Most importantly, investment advisers to investment companies may not charge an investment company a performance fee.

**From.** Kaal and Oesterle, *The History of Hedge Fund Regulation in the United States* (2016), Relaxing the Regulation of Mutual Funds, page 28

**Cite as.** Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974

**Verify.** sha256 of source PDF `7764601d3ed5bb056b58949e8411eff9dfb9855f143719062030c980c5fa801b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Oesterle%20-%202016%20-%20The%20History%20of%20Hedge%20Fund%20Regulation%20in%20the%20United%20States.pdf

**Topics.** private-funds, risk-and-incentives

**Keywords.** performance-fees, mutual-funds, incentives, absolute-return

**Related claims.**

- supported_by: https://wulfkaal.github.io/claims/2715083-017
- extended_by: https://wulfkaal.github.io/claims/2811729-027

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.