Tue, Jul 7, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Investors are forcing hedge fund managers to abandon '2 and 20’ fee model

Monday, September 09, 2013

Precy Dumlao, Opalesque Asia:

Dissatisfied investors are forcing many hedge fund managers to rethink and even completely abandon the traditional '2 and 20’ fee model, according to The Wall Street Journal.

Most hedge fund managers are now charging approximately 1.6% for annual management fee and 18% on profits, "according to industry surveys and interviews with industry executives." The difference in the percentage could translate to hundreds of millions of dollars as last year, the hedge fund industry took in about $50.5bn in management and performance fees, Hedge Fund Research (HFR) is reported as saying.

The pressure are coming mostly from pension funds and other institutional investors, which have billions of dollars into hedge fund portfolios.

Those who were forced to reduce their management and performance fees are hedge funds focused on stocks and commodities as these strategies have not been generating high returns lately, the report added.

One of these industry surveys came from Preqin, a research house, which recently showed that hedge funds that charge the highest fees achieved the best returns in four of the past six years (See Opalesque article here).

Amy Bensted, Head of Hedge Funds Products at Preqin said:......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

 

banner