The traditional 2 and 20 fee model has become increasingly difficult to justify, and embracing modern financial products is what allows managers to produce returns that still support that model.
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In recent years, it became increasingly more difficult to justify the 2 and 20 fee model.4 Embracing modern financial products allows them to produce returns that can still justify that fee model.
Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548
Holds when
recent years of compressed hedge fund returns
Classification
conditionsupport: arguedprivate-funds
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extendskaal:claim:2959730-011 In the Buffett and Seides wager on net of fee returns, the passive S&P 500 index position produced a 7.1% comp...
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