A Bridgewater Associates Alum Is Launching A No-Fee Hedge Fund
Howard Wang, 28, isn't charging a performance fee for his new global macro fund Convoy Investments LLC, Bloomberg News' Kelly Bit reports. Instead, he'll charge only a 1.25% management fee.
It's definitely an interesting approach to attract investors.
Fund managers are paid through a compensation structure commonly known as the "2 and 20," which stands for a 2% management fee and a 20% performance fee charge.
More specifically, "2 and 20" means a hedge fund manager would charge investors 2% of total assets under management and 20% of any profits. While "2 and 20" is the standard in the industry (that's what Bridgewater uses), those numbers can vary from fund to fund. Steve Cohen's SAC Capital, for example, charged 3 and 50 and Jim Simons charged 5 and 44.
Lately, it's become harder for fund managers to justify the fee structure, especially because most funds have been underperforming the broader market.
Wang opened his macro fund back in November, and his fund was up 10% this year through June. That's solid performance, because most macro funds have gotten hammered this year.
Right now, it only manages employee and friend/family capital but he's looking to raise $200 million, the report said.
Let's see if Wang starts a trend.
- Tesla tells some laid-off employees their separation agreements are canceled and new ones are on the way
- Taylor Swift's 'The Tortured Poets Department' is the messiest, horniest, and funniest album she's ever made
- One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
- UP board exam results announced, CM Adityanath congratulates successful candidates
- RCB player Dinesh Karthik declares that he is 100 per cent ready to play T20I World Cup
- 9 Foods that can help you add more protein to your diet
- The Future of Gaming Technology
- Stock markets stage strong rebound after 4 days of slump; Sensex rallies 599 pts