Tue, Oct 21, 2014
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

Banner

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: What's next for trend followers?[more]

    Bailey McCann, Opalesque New York: New research out from Ibbotson touches on a key debate happening among investors and fund managers, specifically whether long term trend followers can survive in the new

  2. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  3. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  4. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  5. Sparx optimistic about outlook for Japan[more]

    Benedicte Gravrand, Opalesque Geneva: According to SPARX, there are causes to be optimistic about the outlook for the Japanese market and the country's economy in general. Sparx Asset Management is a Tokyo-based asset manager, part of