I know, but given that the thread is about Management fees in required return, I thought I would ask why they include it for the endowment when it isn’t mentionned anywhere in the curriculum that management fees should be added to the endowments required return. Should they also be added for the other institutional investors?
Pg. 458 of the text “3.1.2. Return Objectives” for a foundation, mgmt fees are mentioned and the calculation is shown. It’s the same thing for Endowments, page 466 mentions the sum of spending rate, inflation, and cost of generating investment returns.
I’ve never seen it mentioned for banks or insurance companies. And as mentioned aboved, I’ve never seen fees considered for an individual investor.