2 and 20

Cliff Asness Would Be Cheap At Twice The Price

By Matt Levine

Real superheroes deliver real alpha. And real alpha doesn’t come cheap:
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  • 17 Aug 2011 at 1:22 PM

Carlyle Group IPO Is An Eeeeevil Conspiracy But There Are Some Nice Things About It Too

By Matt Levine

If you love a good conspiracy theory but find Ron Paul’s and Rick Perry’s calls to kill Ben Bernanke for counterfeiting a little played out, do we have some good news for you. The Carlyle Group, a mild mannered private equity firm by day that at night transforms into an evil conspiracy among George Bush, Skull & Bones, the Saudi royal family annd the Illuminati, is about to get a lot more public attention.

Bloomberg reports that Carlyle is shopping an IPO. While we do worry that IPOs by smart private equity managers have a pretty solid tradition of top-ticking (Blackstone IPOed in June 2007 and the market has never been the same since), we like David Rubenstein’s efforts to get valued for making good investments instead of just for having a ton of money:
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  • 09 Nov 2010 at 4:42 PM

Millenium’s Izzy Englander Speaks Out Against Tyranny Of Management Fees

By Bess Levin

Izzy Englander’s hedge fund, Millennium Management, does not charge management fees, for the same reason that it does not engage in the sex trafficking of minors or run a white slavery ring on the side: to do so (charge investors fees or force people to work for him against their own will) would be sick, twisted and wrong and, according to Izz, anyone who does should be ashamed of him or herself.

In a rare public appearance, he said: “In the old days the management fee was not commonplace. The business was ultimately run for the bottom line P&L. Investors shared in the business cost rather than an arbitrary pre-established management fee.” Englander added that the origin of the hedge fund industry – as entrepreneurial and opportunistic partnerships between managers and investors – is often forgotten and confused. Instead the term “hedge fund” has become defined by the “two and 20” group, referring to the 2% management fee and 20% performance fee that hedge funds typically charge.

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