Minor Point

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 thoughts on “Minor Point”

  1. 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.

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