Here is a Q&A from GIPS Our firm manages private equity strategies and it is not clear how to provide a fee scheduleappropriate to the composite. Fund-of-funds do not have their ‘own’ fee schedule, what are we required to provide? Within the fund-of-funds structure, there are two levels of fees. The fund-of-funds manager normally charges fees within the fund according to a schedule. This is the schedule that must bedisclosed under the GIPS requirement. In addition, the underlying funds charge fees within their funds which vary according to the funds’ strategy and size and include a performance element.These fees on underlying funds would be very difficult to separate out for a composite, but arefully taken into account in the fund-of-funds performance. Do they mean the following? If the FOF has chosen Hedget equity, global macro and merger equity, we do not have to disclose the fee incurred on those but the fees that FOF that charges on top of these needs to be disclosed? can some one translate this in easier to follow english… thanks
Yes, A FoF’s may have say on average 20-40 different Hedge funds invested in it with fees ranging from say 0/30 to 3/30 or more/less. A FoF’s does not need to disclose these fees. But the FoF’s will have its own Admin fees, accounting fees, Management Fees, and Performance Fees. The FoF must disclose the Mgmt and Performance fees that the FoF itself charges on assets and profits. I can’t recall if it has to disclose the other fees separately or a rough estimate say 10bps. But mgmt and performance fees of the FoF must be disclosed say 1% for Mgmt and 10% for Performance, then if there is a fee schedule then that must be disclosed.
thanks BW, thats what I thought but the way they are wording all this, at times it looks greek and latin.
bigwilly Wrote: ------------------------------------------------------- > Yes, A FoF’s may have say on average 20-40 > different Hedge funds invested in it with fees > ranging from say 0/30 to 3/30 or more/less. A > FoF’s does not need to disclose these fees. But > the FoF’s will have its own Admin fees, accounting > fees, Management Fees, and Performance Fees. The > FoF must disclose the Mgmt and Performance fees > that the FoF itself charges on assets and profits. > I can’t recall if it has to disclose the other > fees separately or a rough estimate say 10bps. > But mgmt and performance fees of the FoF must be > disclosed say 1% for Mgmt and 10% for Performance, > then if there is a fee schedule then that must be > disclosed. “if there is a fee schedule” I think it is safe to assume there is ALWAYS a fee schedule
^99.99% of the time, yes there would be. I never say “always” with CFAI 
bigwilly Wrote: ------------------------------------------------------- > ^99.99% of the time, yes there would be. I never > say “always” with CFAI so if “fee schedule is available in appendix” is missing from disclosures, do we mark it as a Non-compliance with GIPS :)?
I would think so