We believe Blue Sky compensates for its overstated AUM by charging clients egregious management fees, which can reach up to 17% of the capital invested in Blue Sky funds and are charged irrespective of the performance of the underlying investment. Because investors will soon wise up, we view Blue Sky’s fee revenues as inherently unsustainable. In other cases, such as private equity, we present evidence that Blue Sky has overstated its returns on many investments (a practice we believe is systematic). Through the overstatement of AUM and returns, Blue Sky inflates its current revenue and profits, driving up its stock price and attracting further capital.