What CTA fee structure you like the most?

What Fee Structure you like the most?

  • 1.

    Votes: 6 11.5%

  • 2.

    Votes: 2 3.8%

  • 3.

    Votes: 0 0.0%

  • 4.

    Votes: 1 1.9%
  • Total voters
    52

www.rentec.com, but most scarce web appearance ever seen ( make yourself an impression )...In the very moment I am reading a source even citing 5% management fee and a 44% incentive fee...


I did not find any where in they web-site indicates that the fee is 5/44. Where can I find such information?

Thanks.
 
It looks like at least one voter likes option 4 "0%/20% --- 0% management fee, 2o% incentive fee WITHOUT High-Walter-Mark and no hurdle rate".

For the one who voted for option 4, would you mind to share your thoughts?

Why option 4? What are your reasons? Please share your opinion. You voted for option 4 as an investor or as a CTA?

Thanks.
 
Quote from NTB:

If you don't know the answer to this question, you won't make it as a CTA. By the way, I'll take 5% management fee, no incentive all day long. Anyone who didn't vote for that, doesn't have a clue about the business. As an investor, you take 0/25 with high water if you plan on being a long-term investor, you take 0/20 if you are going to redeem on poor performance.
More...

Simple arithmetic tells one that 5 percent of the gross is most likely going to be much larger than 25 percent of the net over time for most managers. You don't need to know much about the business to realize that.

There's an expression on wall street that goes "feed the ducks while they're quacking". Understanding what this means goes a long way towards knowing what fee structure will be used.
 

Depends on if you are the manager or the managed....
Also, very important...depends on if you are making money...


Ok, 4 cases:

1. You are the manager (CTA) and you (CTA) are making money.

2. You are the manager (CTA) and you (CTA) are NOT making money.

3. You are the investor and you are making money.

4. You are the investor and you are NOT making money.

For each case above, what is the option you like the most for each above case and why?

1. 5%/0% --- only 5% management fee, no incentive fee.
2. 2%/20% --- 2% management fee, 20% incentive fee with High-Walter-Mark and no hurdle rate.
3. 0%/25% --- 0% management fee, 25% incentive fee with High-Walter-Mark and no hurdle rate.
4. 0%/20% --- 0% management fee, 20% incentive fee WITHOUT High-Walter-Mark and no hurdle rate.
 
It look like that most people like option 3 "0%/25% --- 0% management fee, 25% incentive fee with High-Walter-Mark and no hurdle rate."

For option 3, as a CTA, during difficulty period, he may do have any income .......
 
It is astonishingly dumb how someone would chose the option 0/25 instead of 2/20 (from the CTA perspective). Your breakeven return is approx. +40% just to equate 0/25 with 2/20. I know many on this site are delusional, however, are you really willing to gamble on more than a 40% annual return and chose a 0/25 instead a 2/20? I would bet that nobody giving this answer is a professional money manager.
 
Quote from NTB:

I would bet that nobody giving this answer is a professional money manager.
More...

Wrong there. But then again I view my fund as a partnership with my investors and not as a get-rich-quick scheme. And I also like to think I get more clients with that fee structure but hard to prove that.
 

It is astonishingly dumb how someone would chose the option 0/25 instead of 2/20 (from the CTA perspective). Your breakeven return is approx. +40% just to equate 0/25 with 2/20. I know many on this site are delusional, however, are you really willing to gamble on more than a 40% annual return and chose a 0/25 instead a 2/20? I would bet that nobody giving this answer is a professional money manager.


Now, if 2/20 is much better than 0/25, please explain to me why 18 voters voted for 0/25 and only 7 voters voted for 2/20?

Thanks.
 
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