My friend opened a fund called xxx fund advisors, managing half billion asset (only a few clients I guess). Its strategy is statistical arbitrage holding 1 to 3 days. I heard its return is single digit. I checked zoominfo website, last year its revenue is only 2 million. Is that possible so low? Even 1% management fee is close to 5 million. The other question, what is the difference a company named fund advisor from normal hedge fund?
If he "just opened" a fund and has so much AUM is a reflection of his experience and ties in the industry. AUM does not guarantee any returns.
its possible he's charging 40bps management fee since it's a single digit performance strategy. It's also possible he's charging performance fee only.
Yes it is. I know a group in Boston with 23B AUM that charges 30 to 35 BPS. Depends what they do for them.
Yep, there some "absolute return" strategies with billions i AUM that pump out 5-8% annually. They have customers for their niche.
To answer your second question: Most set-ups are like this: You have XXX Fund: This holds the investments. For instance the investors own shares in this. You have XXX Fund Advisors: This is the investment manager's vehicle and charges for example 2/20 to the fund. This company employs personnel, buys research, rents offices. Mostly owned by 1 or more partners that make the actual investment decisions for the fund.
Many new funds do not charge any management fee. Very few investors pay management fees to new funds. surf
Good to hear, wish i knew those investors willing to pay management fees to new funds. On another topic, didn't lightspeed change its name to PTS back in 2014? In 2012 I worked closely with Steven Erlich CEO of lightspeed on a project-- great guy! surf