kaal:claim:2959730-015

Shifting inflation indexed hurdle rates from quarterly to monthly calculation lowers manager compensation: for managers with pension plan limited partners this often means receiving 5% plus inflation instead of an 8% hurdle rate.

Source quote, verbatim

Inflation-indexed hurdle rates are now calculated on a monthly not a quarterly basis. For managers with pension plan limited partners that often means instead of an 8% hurdle rate the manager gets 5% plus inflation.

From

Wulf A. Kaal, Blockchain Applications and Fee Structure Developments in Private Investment Funds (2017), III. Factors Creating Downward Pressure on Fees, p. 8
https://ssrn.com/abstract=2959730 · source PDF

Cite as

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

Holds when

managers with pension plan limited partners
inflation indexed hurdle rates

Classification

mechanismsupport: assertedrisk-and-incentives

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