Top quartile private capital funds have lower average management fees, but higher carried interest and hurdle rates
- Q3 2016 hedge fund letters
- Q2 2016 hedge fund letters
Since its founding by Will Thomson and Chip Russell in June 2016, the Massif Capital Real Asset Strategy has outperformed all of its real asset benchmarks. Since its inception, the long/short equity fund has returned 9% per annum net, compared to 6% for the Bloomberg Commodity Index, 3% for the 3 MSCI USA Infrastructure index Read More
Preqin’s 2016 Private Capital Fund Terms Advisor finds that top quartile funds favour fee structures that incentivise strong performance, with lower average management fees and a higher rate of carried interest. Across different fund sizes, top quartile private capital funds consistently have low average management fees: funds with less than $50mn in AUM charge 1.24% on average, while funds with more than $1bn charge an average of 1.05%. By contrast, third quartile funds with less than $50mn charge an average of 2.08% in management fees, while those with more than $1bn charge 1.04%. Overall it is noticeable that the smallest funds have wide variance in their average management fees, while the largest funds all have very similar rates – however, top quartile funds of all sizes have relatively consistent management fees.