As I wrote in my book, my fund did not start out with zero management fees. But my meeting with Mohnish Pabrai, and our subsequent lunch with Warren Buffett convinced me that I had to move my fund to zero management fees — on in which I only make money after I have outperformed for our clients.
A number of years later, after having successfully transitioned to that fee structure, I wanted to learn more about who else was doing something similar. So I put a simple form up on my website and then handed the data to my director, Mark Chapman, who wrote this up in a white paper on Zero Mangement Fees in the Fund industry. That has become one of our most popular white papers — and has been accessed or downloaded more than 3,000 times.
More recently, we ran an online symposium for managers and investors in the Zero Management Fee funds.
I also participated in the upcoming Transparency Task Force Symposium that will take place in London. With that in mind, see here why Andrew Bailey of the UK’s Financial Conduct Authority has the Fund Management industry in its sights.
Lastly, at the recent Daily Journal Annual meeting, Charlie Munger gave a shout-out to Mohnish Pabrai for having gone a full decade without earning any fees in his Buffett style partnership with zero management fees.
You can see the CNBC journalists talk about this at minute 2.40 of this clip
The high level of management fees in the fund industry is an important topic that is not going away. For good reason.
