3 ms·
I'm not sure I understand - what's the benefit to the customer? If you gain alpha from hiring (3), you gain proportion of alpha + alpha. If you hire (4), you're
by navait 12y ago
I'm not sure I understand - what's the benefit to the customer? If you gain alpha from hiring (3), you gain proportion of alpha + alpha. If you hire (4), you're paying a fee of alpha for a gain < alpha. The customer assumes a lot of risk, especially the more common (4) gets. It seems the customer is most likely to lose in this scenario.
- grmarcil 12y agoThe model is from the perspective of fund managers. If you believe his model, then from the other side of the board, as an investor, your conclusion has to be that managed funds are a bad deal, or a break even at best if you find a manager with alpha.