Talking about the hedge fund world:
In addition, TCI, is estimated to have increased funds under management from $8bn in 2006 to $11bn by the end of 2007, a year in which the fund reported a net return of 40pc.
Umm, if you start with 8 and grow it by 40%, don’t you end up with 11.2? So, in fact, people withdrew $200 million from the fund?
Or am I just being pendantic about numeracy here?
2 responses so far ↓
1 Mark Wadsworth // Apr 8, 2008 at 12:16 pm
You’re overlooking Pommygranate’s rule of 2 plus 20. If performance was 40%, the managers will have siphoned off about 20% performance fee £640 million, plus 2% management fee £160 million.
Tim adds. Ah, yes, you’re right.
2 Kay Tie // Apr 8, 2008 at 12:30 pm
“increased funds under management”
Which also includes new money invested in the fund.
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