How much does the NC Pension Fund pay hedge fund advisors?

The answer is hard to figure out.  While the pension fund will disclose (reluctantly) the fees paid directly to managers - in many cases those managers hire other managers who in turn charge another layer of fees.   This practice is common and indeed the norm in the hedge fund industry where investors contract with "fund of funds" managers.

So how much are these hidden fees?   According to the Treasurer's office fees paid to Franklin Street Partners (an alternative investments manager) by the pension fund were around $2.6 million.  But an ongoing SEANC audit reveals that when fees to the funds managed by Franklin Street partners are accounted for, this total fee bill is $16 million.   And this is just one manager.

A more detailed discussion appeared on Forbes.   And a brief summary of the problem was discussed on WRAL news.

Apparently Franklin Street states they aren't doing anything wrong and this is normal industry practice.  I am sure they are correct.  But that's the problem.  Normal industry practice is all about making Hedge Fund managers rich.