Alternative Investment Performance Fee Arrangements and Implications for SEC Regulatory Policy: Comment
Volume: Volume 7, No. 2
Issue: Autumn 1976
Pages: pp. 716-718
Authors: William Margrabe
Title: Alternative Investment Performance Fee Arrangements and Implications for SEC Regulatory Policy: Comment
Abstract: Working from the assumptions that Modigliani and Pogue made in their recent article, this comment explains why there is no incentive for a portfolio manager to prefer their Plan 1 fee over their Plan 2 fee, demonstrates why the portfolio manager and investment company are superfluous, and rebuts the authors' unduly pessimistic conclusions about portfolio manager behavior in an unregulated capital market.
JEL Classification
Capital Markets General (3130)