Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

US based hedge fund managers implement new fee structures

Thursday, February 26, 2015

Bailey McCann, Opalesque New York:

A growing number of new hedge funds offered by new U.S.-based managers have implemented management fee structures that decrease as fund assets grow, according to The Seward & Kissel New Hedge Fund Study. Several findings within the study signaled hedge fund managers’ heightened sensitivity to the needs of investors, and the related imperative to reign in costs. Of all funds studied, 19% adopted a tiered approach to management fees, stepping down to lower rates as assets in the fund surpass pre-established benchmarks.

This trend is also reflective of a similar shift happening in private equity, where GPs are lowering fees in exchange for larger initial commitments.

All of the funds employing the tiered management fee structure had equity-related strategies, raising the question of whether the trend will spill over into funds with non-equity strategies in future years. In addition, the percentage of all funds using equity strategies increased to 73% in 2014, up from 65% in 2013.

The steepest fee discounts happen during the founders round according to the data, with slightly smaller discounts available in later share classes.

Still, even while discounted fees are growing, lock-ups and quarterly liquidity remain the norm. Over 80% of funds have both with the remaining 19% allowing monthly liquidity.

Launch sizes continue to tick upward as well. Survey data shows that at least 40% of new fund launches in 2014 were......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1