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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......................

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