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"Hedge fund manager Kenneth C. Griffin made $1.7 billion" "Mr. Griffin’s firm, Citadel, has grown from a hedge fund that managed family and pension fund money
by asmithmd1 10y ago
"Hedge fund manager Kenneth C. Griffin made $1.7 billion"
"Mr. Griffin’s firm, Citadel, has grown from a hedge fund that managed family and pension fund money into a $25 billion firm"
"Citadel’s flagship Kensington and Wellington hedge funds returned 14.3 percent over 2015."
It might be true but seems incredible, that would mean he personally took 6.8% of the entire fund's capital as a salary. Not salary of course but carried interest - he only has to pay capital gains tax rate because Wall street.
- maxerickson 10y agoThe deal is often 2 and 20. 2% of the invested funds and 20% of the earnings. That lines up okay with your numbers (say he owns a big chunk of the fund, that would make up some of the difference).
- Nrsolis 10y agoKeep in mind that the 2% is there to cover the expenses of the firm and its trading costs. The 20% is the real incentive for the fund managers. Also keep in mind that they only get that if they earn more for the investors than the "hurdle rate" which is an agreed upon metric for return. Quite literally, they only get paid if you do very well in the markets. For every $10 that they grow your money, they keep $2 and you get $8.
- oarsinsync 10y ago> Keep in mind that the 2% is there to cover the expenses of the firm and its trading costs. The 20% is the real incentive for the fund managers. True to a degree, unless your AUM is growing substantially faster than your costs, at which point your fees are covering more than that already.
- whatok 10y agoAnd what almost always follows in that case is that performance starts to lag because most strategies do not scale with how well your fundraising ability happens to be.