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Fund Manager Incentives
Joey122
Posts: 459 Forumite
What is the incentive for a fund manager to perform well - If the fund returns 2% or 8% his fees will still have been booked regardless.
Is it simply the expectation that the fund will grow if its profitable so fees become even bigger
This is very different to hedge funds which chrage 2% fees and 2% of all thats been generated - That is a real incesntive to make sure money is working as hard as possible
Is it simply the expectation that the fund will grow if its profitable so fees become even bigger
This is very different to hedge funds which chrage 2% fees and 2% of all thats been generated - That is a real incesntive to make sure money is working as hard as possible
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Comments
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annual management charges are percentage based and better performance means more charges. Some fund managers will have bonuses based on achieving certain benchmarks. Some have a buy in to the fund house/boutique.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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What is the incentive for a fund manager to perform well - If the fund returns 2% or 8% his fees will still have been booked regardless.
[...]
This is very different to hedge funds which chrage 2% fees and 2% of all thats been generated - That is a real incesntive to make sure money is working as hard as possible
It's only different in the sense that the hedge fund managers charge more. And it's 2% and 20%, btw...0
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