Distribution of incentives 2 you by a firm using your system

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alwayslearning
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Distribution of incentives 2 you by a firm using your system

Post by alwayslearning » Wed Jul 16, 2008 1:14 pm

What are some of your ideas concerning the addition of some of your trading systems to an existing portfolio?

Example...A firm currently has 9 systems they trade and want to add 1 of yours for a total of 10. There will be an equal allocation to each system thus giving your system 10% of the AUM.

Assuming a standard 2 and 20% fee structure, they agree to give you half, so 1 and 10% on the 10% of the total AUM they agree to allocate to your system.

Here is the challenge.....Incentives are not collected unless the enitre portfolio makes new equity highs.(The entire current AUM is from a third party who looks at the allocation as a whole, not system by system.)

You will have months where your system is up, but the total portfolio is down and no incentive will be paid by the 3rd party to the firm. And vice versa.

How would you suggest structuring the arrangement with the firm who wants to add your system (You personally don't have a direct relationship with the 3rd party who provided the money which makes up the portfolio) to make it fair for both parties?

Thank you for your help.

sluggo
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Post by sluggo » Wed Jul 16, 2008 1:29 pm

Here's a wealth of information: HYPERLINK

alwayslearning
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Post by alwayslearning » Thu Jul 17, 2008 1:07 pm

UMMMM sluggo..that was my post on another site. :D

AFJ Garner
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Post by AFJ Garner » Thu Jul 17, 2008 3:11 pm

Long time followers of Sluggo under his various guises will recognize that the aforementioned will be well aware of the point.

You may have given us all a teeny wee clue by the use of rather similar forum names.

alwayslearning
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Post by alwayslearning » Thu Jul 17, 2008 3:21 pm

I was hoping he did, but without knowing him or his style I tried to give him the benefit of the doubt.

I did think it was funny, so if that was the goal....mission accomplished.

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