Performance fee

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.