Rough Calculations on the Numerai Fund Buyback
Disclaimer: Nothing here is investment advice or a recommendation to buy or sell any specific token.
Recently Numerai announced a $1 million buyback of NMR tokens.
Their strong performance over the past year certainly made this possible—but just how profitable has the fund really been? Let’s run some quick back‑of‑the‑envelope numbers.
1. Fee Structure
Most hedge funds charge the classic “2 and 20” (2 % management fee plus 20 % performance fee). Numerai, however, seems to be operating on a “1 and 20” model.
2. Assets Under Management
According to their announcement, AUM has surged to about $441 million. At a 1 % management fee, that alone brings in:
$441 million × 1 % = $4.41 million
3. Performance Fees
Numerai doesn’t publicly break out its performance fees, but we can infer something from a comment by founder Richard Craib on X.
He pointed out that their revenue per employee exceeds OpenAI’s $1.1 million. Although the reported number of employees varies by source, it’s reasonable to use 54.
45
59
54
54
If we assume around 54 employees:
$1.1 million × 54 = $59.4 million in total revenue
If 20 % of that is performance fees:
$59.4 million × 20 % = $11.88 million
4. Total Estimated Revenue
Adding management and performance fees:
$4.41 million + $11.88 million = $16.29 million
That’s more than $16 million in fees—so plowing $1 million back into NMR is well within reach. Investors are seeing roughly a 10 % haul (fees divided by AUM), which is impressive.
5. Thoughts on Execution
Numerai has teamed up with the Coinbase team for this buyback. It will be interesting to see if they lean into aggressive buys to shake up volatility, attract speculators, and maybe even push NMR onto hyperliquid.
6. Incentive Considerations
A challenge for Numerai is that top quants could easily leave for higher pay elsewhere—so there’s limited incentive to HODL an “altcoin.” Deeper liquidity pools (letting traders hedge easily) might encourage longer‑term commitment.
Discussion