# kaal:claim:2959730-011

**Claim.** In the Buffett and Seides wager on net of fee returns, the passive S&P 500 index position produced a 7.1% compounded annual return after nine years against 2.2% for the five hedge funds of funds, evidence that industry performance does not justify the 2/20 fee structure.

**Type.** empirical  **Support.** evidenced

**Holds when.**

- nine years into the ten year 2008 to 2017 wager
- returns measured net of fees

**Source quote.**

> A year before the end of the wager, Buffet's nine-year result is a 7.1 % compounded annual return compared to Seides's 2.2%.

**From.** Wulf A. Kaal, *Blockchain Applications and Fee Structure Developments in Private Investment Funds* (2017), III. Factors Creating Downward Pressure on Fees, page 7

**Cite as.** Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2959730

**Verify.** sha256 of source PDF `ebd86972d8817b0c1c80326ae5564476983cedba3f258ff3b2610f156b93fb50` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Blockchain%20Applications%20and%20Fee%20Structure%20Developments%20in%20Private%20Investment%20Funds.pdf

**Failure mode.** Fee structure unjustified by net of fee performance  (family: agency-cost-and-managerial-opportunism)

**Topics.** private-funds

**Keywords.** performance, fee-justification, passive-investing, hedge-funds

**Related claims.**

- extended_by: https://wulfkaal.github.io/claims/3409548-002

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