Class B shares charge a 2% management fee and a 20% incentive fees.

Last year, Bayou executives took $10.8 million in incentive fees from the funds, according to documents given to investors.

Previously, the general partner earned incentive fees from acquisitions only.

Many of these incentive fees have been in place a long time.

By that way of thinking, incentive fees make the most sense for funds that are not accepting new money.

Vanguard Windsor, for example, now closed to new investors, has an incentive fee, in place since 1977.

Plenty of fund observers like the idea of incentive fees.

Proponents of incentive fees say most fund management companies let themselves off the hook by not tying compensation to performance.

A system of incentive fees may be advantageous when measurement includes other elements, such as quality.

Typically, the managers will also receive an incentive fee based on the performance of the fund, known as the carried interest.