# kaal:claim:2811718-025

**Claim.** Fund managers were incentivized to route capital to Madoff because he charged notoriously low fees for the hedge fund business, taking only transaction fees rather than fees based on assets under management.

**Type.** mechanism  **Support.** argued

**Holds when.**

- Madoff feeder funds and funds of funds before December 2008

**Source quote.**

> Fund managers were incentivized to invest in this manner because Madoff charged notoriously low fees for the hedge fund business (charging only transaction fees rather than fees based on AUM)

**From.** Wulf A. Kaal, *Private Fund Investor Due Diligence – Evidence from 1995 to 2015* (2016), III.B.3. Impact of the Madoff Ponzi Scheme, page 41

**Cite as.** Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

**Verify.** sha256 of source PDF `b52152af561288173840a1cabbcf8f4b337e73507c856ee01600799073f4156f` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20Private%20Fund%20Investor%20Due%20Diligence%20%E2%80%93%20Evidence%20from%201995%20to%202015.pdf

**Topics.** risk-and-incentives

**Keywords.** madoff, feeder-funds, fee-structure, incentives

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.