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Money managers under the microscope

Smith attacks hedge funds’ 2 and 20

September 30, 2010

Here’s the link to Terry Smith’s blog attacking the “unsupportable” practice of hedge funds charging their clients fees of 2 and 20 (2 percent annual and 20 percent performance).

Smith compares the maths that show a $1,000 investment in Berkshire Hathaway in 1965 (when Buffett began) would last year be worth $4.3 million, with a hedge fund charging 2 and 20.

Apparently, of the $4.3 million, $4 mln would belong to the manager and only $300,000 to you…

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