Published on: 08/08/2017
Term of The Day: Hurdle Rate
A hurdle rate is the minimum rate of return on a project or investment required by a manager or investor. The hurdle rate denotes appropriate compensation for the level of risk present; riskier projects generally have higher hurdle rates than those that are deemed to be less risky. In hedge funds, the hurdle rate refers to the rate of return that the fund manager must beat before collecting incentive fees.
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