Re:New York Discovers Wall Street Charges Fees
by navait on Friday April 10, 2015 @01:20AM
(#9352694)
I'm not sure I understand - what's the benefit to the customer? If you gain alpha from hiring (3), you gain proportion of alpha + alpha. If you hire (4), you're paying a fee of alpha for a gain < alpha. The customer assumes a lot of risk, especially the more common (4) gets. It seems the customer is most likely to lose in this scenario.
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Re:New York Discovers Wall Street Charges Fees
by grmarcil on Friday April 10, 2015 @01:29AM
(#9352723)
The model is from the perspective of fund managers. If you believe his model, then from the other side of the board, as an investor, your conclusion has to be that managed funds are a bad deal, or a break even at best if you find a manager with alpha.