ilio

Leverage.

Because fees as a manager of someone else’s money can be higher than the full amount of the returns if it were just your own money.

Fees on someone else’s capital: 1% of 20% of 1bn = 2m

Returns on your own capital: 20% of 1m = 200k

Lots of signs of AI writing also: “not this, but that” constructions everywhere. The first paragraph in Final Thoughts is pure ChatGPT.

It’s hard to read any blog anymore without trying to work out which part is actually from a human.