By Megan Czasonis, Mark Kritzman, Baykan Pamir, and David Turkington.

Published in the Journal of Portfolio Management, Summer 2018.

Investors are often faced with a choice between a flat fee and a performance fee. Although there are no simple rules to guide investors in their choice of a fee structure, we believe that our certainty equivalent methodology will enable investors to determine the optimal fee structure for a given set of circumstances.