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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. Also keep in m
by Nrsolis 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.
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.