Endowment Required Return-Include or not Management fees?

Hi All!

My doubt is if we have to include the management fees on the required return of an endowment/foundation.

I know we have to include the spending rate+inflation+investment fees… but management fees I have seen both possibilities.

Someone now about this?

Thanks!!

Not included.

The textbook does not mention about management fees too.

That is why I have doubt… in Mark Meldrum’s mock he commented that management fees are already included in the the spending rate. However, doing a old CFAI am mock, we have to add the management fees to the required return…

So I’m very confuse

my impression is only operating expenses are included in the spending rate, but never has the curriculum mentioned management fee being included.

what is the “investment fee” and how is it different from management fee?

This would be investment management fees, which needs to be added separately to get the required return.

Seems more salary/fees paid to the foundation/endowment to manage the operational/admin/grants…

I heard his mock exams have been set to be more difficult than normal, but I don’t think he should go beyond the curriculum.

Did we ever come to a conclusion on this? In MM mocks return objective = spending rate + inv fees (does not include mgmt fee)

In the 2016 CFA mock question 1: required return = spending rate + mgmt fee + inflation (clearly states management fee, not investment fee)

Operating Expenses are included in spending rate already. Investment Management fees are on top of spending rate.