Would like to solicit your opinions. What fee structure you like the best as investor or as a CTA? And why? 1. 5%/0% --- only 5% management fee, no incentive fee. 2. 2%/20% --- 2% management fee, 20% incentive fee with High-Walter-Mark and no hurdle rate. 3. 0%/25% --- 0% management fee, 25% incentive fee with High-Walter-Mark and no hurdle rate. 4. 0%/20% --- 0% management fee, 2o% incentive fee WITHOUT High-Walter-Mark and no hurdle rate.
Depends on if you are the manager or the managed.... Also, very important...depends on if you are making money...
In the grand scheme of things, I think charging the most (within reason of course) of profits and profits only make the most sense for CTA and client. It puts everyone on the same team - we all make $ if the CTA does well. If not, at least the investor knows the CTA is not making money and obviously they would like to change that.
It looks like no one like option 1 " 5%/0% --- only 5% management fee, no incentive fee". Why? What is your reason? Please share your opinion. Thanks.
As I mentioned above, I would want a price structure that puts investor and CTA on the same team - to make profits. Just charging a 5% fee, regardless of profitability, is an expensive mutual fund. If you don't make money, you still get paid. Investors can get that structure anywhere now.