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Alternative Market Briefing

Global hedge funds slicing fees to draw investors

Monday, October 10, 2016

Komfie Manalo, Opalesque Asia:

From Asia to Australia, to Europe and across the Pacific in the U.S., hedge funds across the globe are reducing their management fees in a desperate effort to maintain investors and attract new ones amidst poor returns, Reuters reported citing industry figures.

The report quoted David Saunders, chief executive of K2 Advisors, as saying, "There isn't a manager out there who isn't thinking about lowering fees." K2 Advisers has nearly $10bn invested with hedge funds on behalf of its clients.

Amongst the latest hedge fund to slice its fees is U.S. based Caxton Associates, following earlier announcements by Och-Ziff Capital Management and Tudor Investment Corp to cut charges.

Singapore-based data provider Eurekahedge said there is a growing trend amongst hedge fund managers to cut down on fees. It compiled data from over 2,600 hedge funds in the Americas, Europe and Asia showing that the average annual management fees have fallen to 1.39% this year from 1.44% in 2015 and 1.68% nearly 10 years ago.

Oliver Muggli, partner at multi-family office Mandorit, also commented, "A lot of people invested in hedge funds ... and they've all been rather disappointed about the performance. It's an asset class which probably will face more challenge and more outflows ......................

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