Just to clarify, a managed account is a separate account and the assets in that account are not co-mingled with fund assets.
Not quite sure that I follow your math here. You stated that returns over 15% per annum would be paid at 50%. So, for your example, if a manager returns 20% (2M), what they would actually make is (1.5M*20%) + (.5M*50%)= $550k. Better than the $400k with a typical 20% incentive (although you are likely not paying the typical 2% mgt fee, which would actually make the total 2/20 deal come out to $600k), but certainly not the $1M that your example came up with. Maybe I am missing something here? If anyone is interested, I'll offer the same deal in any increment over $500k, with a straight 50% payout, not over a 15% hurdle. Just so long as you don't have a historical drawdown over 10%. Cheers
With £1 million, I can take it to £2million a year. Don't need any more "fund". If making 1 million a year is not enough for you, you are too greedy. greedy kills. always a leamer
Thanks for catching my typo and I actually asked the moderators to remove that calculation as it was incorrect. When I realized it, it was after 30 minutes had elapsed, therefore I was unable to edit the post myself I was planning on explaining the correct calculation to anyone who contacted me, but so far I haven't reached any fund managers through Elitetrader. You are also correct that no management fee will be paid. If you have the capital ($9M per account) to fund such an arrangement as you proposed, we should talk as I can certainly find a few takers....