Micro-Funds structure

[bronks]

I've been trying to come up with a management fee model for a 75k friends and family account, that works. Obviously the 2/20 hedge fund model doesn't work because assets are too small. The best I could come up with is a shared hourly/salary rate, which I can't find a balance. For something like this to be even worth the time and headache, a fund manager salary of no less than 100k per year would seem to be in order. Obviously, just doing the math between fund size and fees, this doesn't make sense.

Anybody have experience with this? Maybe some examples of how some of you set up and structured a F&F account?


NOTE: Sorry about the Daily Hottie thing. Been real busy lately.

 

[nazzdack]

Quote from bronks:
....Hottie thing.

1) No management fee.
2) Your incentive fee can be 40% to 50% of anything beyond 20%, i.e. the "hurdle". That should give you motivation to "swing for the fences". Smaller accounts merit that type of arrangement.