If you don't know the answer to this question, you won't make it as a CTA. By the way, I'll take 5% management fee, no incentive all day long. Anyone who didn't vote for that, doesn't have a clue about the business. As an investor, you take 0/25 with high water if you plan on being a long-term investor, you take 0/20 if you are going to redeem on poor performance.
Exactly - a flat 5% fee is only advantageous to the CTA. If you are trying to attract new clients, this is a terrible idea. It's great for you, but if you are taking 5% of 0, it doesn't mean anything. As I said, a 5% CTA is a really expensive mutual fund. Your goal is to collect assets and keep them as long as possible. That's it. You just need to make enough to keep people around. Some sort of incentive fee puts you on the same team as your investors and is an easier sell. There is a reason why many CTA's and hedge funds are set up this way. You are not the first person to think about just charging a ridiculous management fee, regardless of performance.
Yes ! As far as I am informed RENTEC´s Simmons is charging 3 % management fee and 44 % incentive fee !
It looks like at least ONE like option 1 " 5%/0% --- only 5% management fee, no incentive fee". For the one who voted for option 1, would you mind to share your thoughts? Why option 1? What is your reason? Please share your opinion. Thanks.
It's obvious. I voted from a CTA perspective. Your breakeven would be 25% gross return at a 0/20, a 20% gross return at 0/25 and a 15% gross return at 2/20. No matter how confident you are in your system, those numbers are unrealistic over any length of time and capital base. Keep in mind, those are breakeven numbers just to receive the 5%. Another poster made a point about capital raising difficulties related to the different fee structures, etc. However, I think the question is not that involved and merely asks about fee structure. Marketability is certainly a concern and if marketing is a concern, 2/20 is likely the best course.
It's obvious. I voted from a CTA perspective. Your breakeven would be 25% gross return at a 0/20, a 20% gross return at 0/25 and a 15% gross return at 2/20. I think the breakeven point for 2/20 is about 17%. 17 - 2 = 15 15 * 0.2 = 3 2 + 3 = 5
www.rentec.com, but most scarce web appearance ever seen ( make yourself an impression )...In the very moment I am reading a source even citing 5% management fee and a 44% incentive fee...