Quadriga Superfund - Managed Futures
- Thread starter USAtrader
- Start date
In light of all the debate regarding Quadriga, I decided to read their disclosure document to gain a better perspective of what they are doing and what they are making off of this. Now I know that its common practice for CTA's and their ilk to charge 2% management fees/20% performance fees. I also know that many CTA's who hire asset allocators to assist in the asset gathering do a split on the management fees or will give up a certain percentage on the performance fees. Now, I get to the Quadriga disclosure document and I find the following fees listed and amortized against the account on a monthly basis:
SERIES A
Management Fees 1.85%
General Partner Perfomance Fees(1) 25.00%
Selling Commissions 4.00%
Offering Expenses 1.00%
Brokerage Fees(2) 3.75%
Redemption Charges(3) 0.00%
Less Interest Income 2.00%
12 Month Breakeven 8.75%
(1) No performance fees will be charged until breakeven costs are met.
(2) Assumes 1,500 round-turn commissions per million dollars per year at $25 per transaction
(3) No additional charges or fees are proposed on redemption of Units.
SERIES B
Management Fees 1.85%
General Partner Perfomance Fees(1) 25.00%
Selling Commissions 4.00%
Offering Expenses 1.00%
Brokerage Fees(2) 5.63%
Redemption Charges(3) 0.00%
Less Interest Income 2.00%
12 Month Breakeven 10.63%
(1) No performance fees will be charged until breakeven costs are met.
(2) Assumes 2,250 round-turn commissions per million dollars per year at $25 per transaction
(3) No additional charges or fees are proposed on redemption of Units.
Now here is a further caveat that Quadriga states in its disclosure document "The fees payable to Quadriga Capital Management were established by it and were not the subject of arm's-length negotiation. Furthermore, the fact that Quadriga Asset Management is an affiliate of Quadriga Capital Management presents the possibility of Quadriga Capital Management increasing the level of trading to generate greater commission income for Quadriga Asset Management".
SERIES A
Management Fees 1.85%
General Partner Perfomance Fees(1) 25.00%
Selling Commissions 4.00%
Offering Expenses 1.00%
Brokerage Fees(2) 3.75%
Redemption Charges(3) 0.00%
Less Interest Income 2.00%
12 Month Breakeven 8.75%
(1) No performance fees will be charged until breakeven costs are met.
(2) Assumes 1,500 round-turn commissions per million dollars per year at $25 per transaction
(3) No additional charges or fees are proposed on redemption of Units.
SERIES B
Management Fees 1.85%
General Partner Perfomance Fees(1) 25.00%
Selling Commissions 4.00%
Offering Expenses 1.00%
Brokerage Fees(2) 5.63%
Redemption Charges(3) 0.00%
Less Interest Income 2.00%
12 Month Breakeven 10.63%
(1) No performance fees will be charged until breakeven costs are met.
(2) Assumes 2,250 round-turn commissions per million dollars per year at $25 per transaction
(3) No additional charges or fees are proposed on redemption of Units.
Now here is a further caveat that Quadriga states in its disclosure document "The fees payable to Quadriga Capital Management were established by it and were not the subject of arm's-length negotiation. Furthermore, the fact that Quadriga Asset Management is an affiliate of Quadriga Capital Management presents the possibility of Quadriga Capital Management increasing the level of trading to generate greater commission income for Quadriga Asset Management".
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Hey Vulture, you know what's even more amazing? That their performance numbers over the last 8 years is net of fees. So they have averaged 30% to 40% net of all those high fees. My guess is if the performance numbers come down, so will the fees. I have actually seen hedge funds charge 50% performance fees if you can believe that. I know LTCM charged 35% performance fees.
Hey Damir, I use to run a fund and I had that statement in my prospectus too. Not because I would actually do that but my lawyers told me to put it in. I would be curious to hear if Aaron Schindler also has such a statement like that in there. I have found after reading hundreds of hedge fund prospectuses that this line is quite common. Funds tend to cover their ass a lot and go really over the top in what they say.
This is in the Schindler Trading disclosure document: "The General Partner, its employees and affiliates, may act as investment advisors or investment managers for others, may manage funds or capital for others, may have, make, and maintain investments in their own names or through other entities, and may serve as consultants, partners, or stockholders of one or more investment funds, partnerships, securities firms, or advisory firms."
We also have a requirement in the limited partnership agreement that I eat my own cooking: "The General Partner shall at all times maintain his Capital Account equal to at least the lesser of 1% of the total Capital Accounts in the Partnership and $100,000."
I hold a couple stock index futures (Eurostoxx & Russell minis) in my personal account to get some equity exposure, but these aren't contracts we trade in the fund. I invest in my fund and am planning to add more now that my allocation has declined in the current drawdown.
I'm happy to send anyone who is interested a disclosure document. Just email me your email address.
i if i give someone my money to manage, i want their undivided attention, their unconflicted interest. if i know the manager personally, the disclosure in question might not be a problem - but from a stranger? not for me, thanks, lol. and please - i'm not taking shots at you, i'm talking in general. you followed your legal counsel and i have no reason at all to believe you aren't a standup individual.
This is a general question about high water marks for Aaron or any other managers out there. Is the high water mark specific to each investor's account depending on when they begin the program? Or is everyone tied to the overall fund performance, so that new equity highs are determined by the fund NAV and not their specific account equity? Sorry for the simple question.