With cash generating 5.25%, the Texas Teacher Retirement System, is quickly gaining additional signatories to its May 30th letter, which argued that a misalignment in fee structures has become more evident in the current market.
To help contextualize performance in the industry, we shared Index returns by strategy which are referenced in the article below. When it comes to cash hurdles, we agree they are an important tool to better align interests between GPs and LPs, and can serve as a benchmark to measure a manager’s skill.
We also believe that accurate indices add an additional dimension to help allocators in benchmarking the funds they invest with, and quantify their skill relative to their peer group. This transparency also helps determine whether a fund’s performance justifies its fees, and similar to the letter’s outlined objectives, promotes proper risk taking and holding managers accountable that they are doing what they say they do.
We are happy to discuss this with issue with allocators and managers.
Check out more in the link below!