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Fund managers earn fees whether their investments gain or lose money, making it a business model that can't fail. The top ten funds capture a disproportionate share of total market returns, concentrating wealth among a few elite managers.
Fund managers earn fees whether their investments gain or lose money, making it a business model that can't fail. The top ten funds capture a disproportionate share of total market returns, concentrating wealth among a few elite managers.
This is why finance and fund management is like one of the best businesses in the world.
You get hundreds of millions in fees guaranteed regardless of whether you're up, whether you're down. We make money either way. And then like try to do your best in terms of performance. And in the long run, you will be judged on the performance. But in the short run, it's hard to tell what's working, what's not.
Well, you know, it's interesting. If you look at where the real money is made, it's in the top 10 is where a disproportionate amount of the returns are. There's some kind of network effect. It is the community.
Well, in venture, the hot startups want to be with the hot funds, and only the hot funds get to be on the cap table. So the security selects the, the investor, not just the investor selecting the security. That's where the network effect comes in. That's where the brand effects come in. And that's why Sequoia and Benchmark and these other guys will keep showing up in the top, because if I'm one of the top startups, I want them.
