Alpha Captech charges a performance
fee for its investment manager services because when done right it creates better incentives for all relevant parties. In particular,
Alpha Captech's performance fee is structured so that it only pays for
long-term alpha generation in the fund.
More specifically, Alpha Captech only gets paid to the
degree that its investment fund delivers better long-term returns after
all investment expenses than a hurdle rate equal to the return of a
long-only index fund with 0.5% annual costs that follows MSCI's world stock index
(ACWI, Net, USD, All Cap). To be sure, Alpha Captech applies an
unlimited high watermark (not truncated in any way). Also the
performance fee crystallizes annually on January 1st.
In order to provide full investor
transparency about the performance fee calculation Alpha Captech has
made a complete 100% accurate spreadsheet simulation of the performance
fee calculations as they are for Alpha Captech's back-tested performance
data since January 1992. Alpha Captech's investors can use that
spreadsheet simulation to verify the exact consequences (payment
dynamics) of using the specific calculation method for the performance
fee that Alpha Captech applies for its investment fund.
Alpha Captech knows that our method for
performance fee calculation is best practice in the investment fund
industry and we provide Alpha Captech's investors with the tools they
need to verify this by themselves.