Tue, Sep 2, 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

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. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the study

  2. Legal – GE Capital and Petters-related hedge fund in legal battle, SEC sanctions Donald Brownstein's hedge fund over conflicts of interest[more]

    GE Capital and Petters-related hedge fund in legal battle From Startribune.com: A billion-dollar legal battle is brewing in Florida over who knew what and when about the decade-long Ponzi scheme operated by former Wayzata businessman Tom Petters. The bankruptcy trustee for two failed Flo

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius