Protégé Partners LLC is a fund of funds. That means that in addition to the fixed % fee and success fee you pay the underlying hedge funds, there's also a fee layered on top of that by the fund of funds. The article says that Protege charges 1% for its funds of funds. Because the fund of funds might generate positive returns overall even when some of the underlying funds don't, that means that the extra layer of fees generates a significant additional drag.
In other words, Buffett is specifically betting against a fund of funds, because of the double layer of fees.
It would be great if there as a fund of funds ETFs that we could short as a pair trade with SPY.
-
Protégé Partners LLC is a fund of funds. That means that in addition to the fixed % fee and success fee you pay the underlying hedge funds, there's also a fee layered on top of that by the fund of funds. The article says that Protege charges 1% for its funds of funds. Because the fund of funds might generate positive returns overall even when some of the underlying funds don't, that means that the extra layer of fees generates a significant additional drag.
Jun 10 02:48 am
|Rating:
0
0
All Comments by Lisa »Buffett's Strange Bet [View article]
In other words, Buffett is specifically betting against a fund of funds, because of the double layer of fees.
It would be great if there as a fund of funds ETFs that we could short as a pair trade with SPY.