What is the difference between high water mark and hurdle rate?

A hurdle rate would be a minimum return required before a management incentive fee would kick in. An minimum requirement example might be LIBOR + or a Risk Free Rate, etc.

A high water mark is the highest peak in value an investment fund has reached. High water marks are setup to ensure that high fees aren't paid for poor performance. In other Words, if the manager loses a bunch of money, you don't pay a performance incentive fee until the fund is back up to the high water mark.