a half Billion fund with so low revenue?

[trend2009]

My friend opened a fund called xxx fund advisors, managing half billion asset (only a few clients I guess). Its strategy is statistical arbitrage holding 1 to 3 days. I heard its return is single digit. I checked zoominfo website, last year its revenue is only 2 million. Is that possible so low? Even 1% management fee is close to 5 million.

The other question, what is the difference a company named fund advisor from normal hedge fund?

 

[MattZ]

If he "just opened" a fund and has so much AUM is a reflection of his experience and ties in the industry.
AUM does not guarantee any returns.

 

[truetype]

My friend opened a fund called xxx fund advisors, managing half billion asset (only a few clients I guess). Its strategy is statistical arbitrage holding 1 to 3 days. I heard its return is single digit. I checked zoominfo website, last year its revenue is only 2 million. Is that possible so low?

If he's really your friend, ask him about it over a beer. Zoominfo is worthless.

 

[R1234]

its possible he's charging 40bps management fee since it's a single digit performance strategy.
It's also possible he's charging performance fee only.

 

[Robert Morse]

its possible he's charging 40bps management fee since it's a single digit performance strategy.
It's also possible he's charging performance fee only.

Yes it is. I know a group in Boston with 23B AUM that charges 30 to 35 BPS. Depends what they do for them.

 

[bln]

Yep, there some "absolute return" strategies with billions i AUM that pump out 5-8% annually. They have customers for their niche.

 

[Chuck Krug]

To answer your second question:
Most set-ups are like this:
You have XXX Fund: This holds the investments. For instance the investors own shares in this.
You have XXX Fund Advisors: This is the investment manager's vehicle and charges for example 2/20 to the fund. This company employs personnel, buys research, rents offices. Mostly owned by 1 or more partners that make the actual investment decisions for the fund.

 

[marketsurfer]

Many new funds do not charge any management fee. Very few investors pay management fees to new funds.

surf

 

[Robert Morse]

Many new funds do not charge any management fee.

That is not what I'm seeing.

 

[marketsurfer]

That is not what I'm seeing.

Good to hear, wish i knew those investors willing to pay management fees to new funds.

On another topic, didn't lightspeed change its name to PTS back in 2014? In 2012 I worked closely with Steven Erlich CEO of lightspeed on a project-- great guy!

surf