Analyst's hedge fund: 11.7% performance fee and market-beating returns

Analyst's real estate hedge fund charged unusually high performance fees after delivering impressive outperformance over the benchmarks. The fund's reports reveal the complex strategy, leverage, and high costs for investors.

The Analyst (5D) Israel - Overseas Real Estate Multi Strategy hedge fund generated a 2.1% return in the first half of 2026, while its benchmark fell by 1.15%. The fund's assets, utilizing complex strategies and leverage, grew to approximately ₪33 million. The success was also reflected in management fees: in 2024, total expenses in the fund reached 13.4% of assets, with performance fees alone accounting for 11.68%.

Analyst Investment House published its periodic reports for its various mutual funds, revealing a prominent success story in its real estate-focused hedge fund. The "Analyst (5D) Israel - Overseas Real Estate Multi Strategy" fund, operating as a mutual hedge fund, posted impressive performance in the first half of 2026, beating its benchmarks by a wide margin. This success highlights both the potential and the high costs of active and complex investment strategies.

According to the periodic report, the fund recorded a return of 2.1% in the period between January 1 and June 30, 2026. This came while its weighted benchmark, consisting of 70% TA-Real Estate Index and 30% MSCI US Real Estate Index, posted a negative return of 1.15% during the same period (2026-03-089275, p. 7). This performance gap continues the trend from 2024, when the fund generated a phenomenal return of 48.73% compared to just 22.97% for the benchmark (2026-03-089275, p. 7).

The fund's strategy, as its name implies, is "Multi Strategy". The fund manager deploys diverse trading strategies, including long and short positions, derivatives, and leverage, focusing on real estate markets in Israel and the US. The investment policy allows exposure of up to 200% to equities and up to 120% to foreign currency (2026-03-089275, p. 2). This flexibility allows the fund managers to seek profits even in a declining market, while simultaneously exposing investors to high risk levels.

Performance success has also translated into sharp growth in assets under management. The fund's net asset value (NAV) surged from about ₪8.3 million at the end of 2024 to approximately ₪33 million at the end of June 2026, an increase of about 300% (2026-03-089275, p. 10). This growth reflects both positive returns and capital inflows from new investors.

However, success comes at a price. The fund's fee structure includes a fixed management fee of 1.5% per year, plus a 20% performance fee on profits above a High Water Mark (2026-03-089275, p. 1). The performance fees alone, charged following strong performance, spiked the fund's total expense ratio. In 2024, total fund expenses stood at 13.40% of average net asset value, with performance fees accounting for 11.68% of that amount. In the first half of 2026, with more moderate returns, total expenses stood at 1.31%, of which 0.51% were performance fees (2026-03-089275, p. 9).

Alongside the hedge fund, Analyst manages a wide range of products. By comparison, "Analyst Savings Monies", a risk-free shekel fund, manages approximately ₪1.59 billion in assets and charges a management fee of just 0.12%. Its return in the first half of 2026 stood at 2.00% (2026-03-089280, pp. 1, 5, 8). At the other end of the risk spectrum is "Analyst Leveraged Equities", which charges a 3.75% management fee and achieved an 18.4% return in the first half of 2026, but manages a modest asset base of only about ₪1.1 million (2026-03-089274, pp. 1, 4, 7).