Recently, I have been thinking about the different perspectives between being a GP and a LP of a hedge fund. Intuitively speaking, I know the best business model for GP may not be the same for LPs. From a GP’s perspective, the best business model generates a stable fee income from a large asset base. From LP’s perspective, the better business model generates a higher performance from a small asset base. We tried to mitigate this conflict of interests by demanding a GP to invest more capital in their own fund as a LP. So far, this discipline worked in favor for our interests as a LP.
Sushi and Hedge Funds
Sushi and Hedge Funds
Sushi and Hedge Funds
Recently, I have been thinking about the different perspectives between being a GP and a LP of a hedge fund. Intuitively speaking, I know the best business model for GP may not be the same for LPs. From a GP’s perspective, the best business model generates a stable fee income from a large asset base. From LP’s perspective, the better business model generates a higher performance from a small asset base. We tried to mitigate this conflict of interests by demanding a GP to invest more capital in their own fund as a LP. So far, this discipline worked in favor for our interests as a LP.