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Maybe it's just me, but the maths seems strange. I just quickly glanced at some figures, like "Have they earned it?", and it seemed wrong. The author says the
by guylhem 13y ago
Maybe it's just me, but the maths seems strange.
I just quickly glanced at some figures, like "Have they earned it?", and it seemed wrong.
The author says the total return for say Barclay was 12.61%.
bc -l running in a terminal disagree
Taking 100 as the base value to ease our math:
100x1.112x1.0825x0.9452x1.1088=126.156497322240000
That's a 26% something cumulative return in 4 years. What is this 12.61% meant to represent?? The average per year was closer to 6.5% if that's what he meant.
(Edit- replaced the * by x and added an =)
- rm999 13y ago>The rule of thumb is that hedge funds charge a 2% per year management fee and keep 20% of all profits, >All returns shown are net of fees So, subtract 20% from the 3 positive numbers, and that's about 6% in fees (this may be off by a bit, I'm quickly approximating the math in my head). Subtract another ~8% for 4 years of fees, and that's about 14% combined fees. 26% - 14% = 12%. Seems to be about right. The author could have made the way he calculated the fees more clear, but his point stands that a huge % of hedge fund profits go to fees.