Texas Teachers - new Fee Model for Hedge Funds

Will 1+30 become the new standard? Relating the higher performance fee to some kind of hurdle rate is the problem. Which rate is suitable? And if is is some money market rate this is particularly problematic. At present rates are so low that beating them would not be that onerous. And if rates are high, 6, 7 or 8 pct, then the hurdle is difficult to overcome.

New Fee Model for Hedge Fund Investments

Outlook for Actice Asset Management no so bright

Morgan Stanley on active managers - Business Insider

AllianceBernstein tries Performance Fees

The basic fee of 0.05% in case the funds underperform are quite meagre, will this approach be sustainable? The fee income has to pay for a lot of expenses. The comp for CEO Peter Kraus alone ($6.35 Mio according to Yahoo) would need a fund volume of 12.7 Billion (!!) to pay for, and that leaves NOTHING for any other costs!
AllianceBernstein Fires the Latest Shot in the Fee Wars (Barron's, PayWall)

The Dystopian Future of Price Discrimination

Time for our Solons to stamp out any incipient abuses. Start with Google - ban collecting search history, ban selling slots on search results, then Amazon - break up the business, own sales and agency sales, Apple - divest from content sales

The Dystopian Future of Price Discrimination - Bloomberg View

Disclosing your Salary to prospective Employer?

This is why you shouldn’t lie to a future employer about your salary

London’s single market access will end with Brexit

No need to run scared, as I have stated earlier, an analysis of all business lines shows that the EU umbrella is not really that important. Major firms are already present in key locations on the Continent. In the long run a dynamic London financial centre serving the world without cumbersome regulations will win over Paris and Frankfort any time! And what about 'giving access' to London to banks/asset managers in the (doomed?) Eurozone?
London’s single market access will end with Brexit

Untested Robo-Advisers Are Becoming a Big Market Risk - Bloomberg View

Assets under Management by Robo-Advisers are not yet that large. But when they are in the hundred of billions it will create the mother of all panics. The programs behind them - in addition to 'sophisticated' quant funds - will all rush to the exit at the same time! Sprinkle a few billions of ETF into the mix and the fun can start! No amount or margin/collateral will be able to cope with the resulting price changes. As I often said in this blog - near instantaneous price moves of 20-25% have to be expected. Remember October 1987! It DID happen, and that was at a time when overall volumes and assets where quite a bit smaller.
Untested Robo-Advisers Are Becoming a Big Market Risk - Bloomberg View

No one voted for Exchange of Tax Information

Quite apart from the fact that there are simpler ways to increase tax revenues the international agreement violates basic rules of a proper democracy. The agreement is negotiated several steps removed from what ordinary citizens care about, or what they want. Anonymous bureaucrats deal over the head of citizens in backroom fashion. A withholding tax would have been simple to introduce and administer and the privacy of savers would have been preserved.
The hypocrisy surrounding this form of legislation is evident when just recently the Italian government announced that the Super rich would be offered tax-haven status in Italy. A billionaire would be able to pay just €100.000 (!!) per year in full settlement of his tax obligations! And an (in)famous Italian, Signore Draghi does his best to confiscate the incomes of hundreds of millions of hard-working and honest citizens in order to bail out his profligate fellow-citizens.

Merger Poker - EFG, BTG Pactual and BSI Lugano

There is lots of talk about the need to get bigger in the Financial Services Industry. But there are plenty of potholes on the route to 'Bigger and Better'. Apart from accounting and valuation issues the question of contrasting management cultures can also pose significant integration risks. Do not write off smaller competitors or even nimble mid-sized Asset Managers or Private Banks.
Joe Strähle verrechnete sich mal kurz um 41% - Inside Paradeplatz

How can I make performance reviews less painful for all concerned?

There was a time when people knew each other and box-ticking exercises were not necessary, O tempora o mores! Managing relationships with colleagues and staff should be a year-round task but all-too-often problems are allowed to fester - and the ritual of an annual review will not be enough to defuse the situation, if anything it just creates more tension.
How can I make performance reviews less painful for all concerned?