The rise and fall of Mr Two-and-Twenty

‘Mr Ten Per Cent’ has long been a term of contempt. Indeed, finagling Hollywood agents’ decimation of their clients’ earnings resulted in one of the few successful exports of a Spoonerism to California — to explain the difference between a talent agent and a rooster (the latter ‘clucks defiance’). So why has it taken a global credit crisis, the collapse of several major investment banks, and Bernard Madoff’s alleged £50 billion fraud, for anyone to question the remuneration of the agent’s Wall Street equivalent: ‘Mr Twenty Per Cent’? Or, to use the full, double- barrelled monicker more befitting his Mayfair cousin: ‘Mr Two-and-Twenty’?

He is, of course, the hedge fund manager, who has been charging clients 2 per cent of assets under management plus 20 per cent of profits ever since Alfred Winslow-Jones, the father of the hedge fund industry, first had the chutzpah to introduce this fee structure on an absolute-return fund back in 1949.