market folly

Here's the latest investor letter from Mohnish Pabrai and his hedge fund Pabrai Investment Funds. Pabrai is unique in that he has structured his fund similarly to the early Warren Buffett partnerships. Typical hedge funds charge a flat 2% management fee on assets and then a 20% performance fee incentive on top of that. Pabrai on the other hand charges no management fee and then no incentive fee until the fund reaches 6%+. After that threshold is reached, they can then charge a 25% incentive fee. So, his interests are aligned with the fund as he does not make money until investors do. Not to mention, he has 'skin in the game.'

Embedded below is the investor letter with Q3 2009 results and commentary:



You can also download the .pdf here.