You Have to Attack the Incentive System: Aperture's Kraus

The video discusses the founding of Aperture, a firm that links manager pay to performance, aiming to address persistent performance challenges in the active management space. It explains Aperture's recruitment strategy, which focuses on managers with a history of strong performance, and details the firm's fund structure, which includes a modest base fee and a performance fee. The video also compares ETFs and mutual funds, highlighting differences in fees, tax efficiency, and trading practices.

What was the main idea behind linking pay to creating alpha?

What challenges do larger asset managers face in terms of performance?

How does the incentive system at Aperture differ from traditional mutual funds?

What are the implications of tracking errors in ETFs compared to mutual funds?

What potential changes could be made to mutual funds to enhance their trading efficiency?