Wed, May 23, 2018
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Hedge fund operating costs go under the microscope

Thursday, May 10, 2018

Bailey McCann, Opalesque New York:

The operational cost of running a hedge fund is coming into focus for managers and investors in the wake of MiFID II. The regulation will require managers to be more transparent about the cost of doing business, which could put even more pressure on fees and expenses. At Context Las Vegas, allocators noted that managers will have to provide clear justifications for all fees.

"We think the next five years are not going to be about performance fees, instead the fight is going to be about how much it costs to run the business," said David Saunders, Founding Managing Director and Co-Founder at K2 Advisors from the stage. "One example I would give is when we started in the '40 act space, mutual fund managers have a total expense ratio fee. They have to get that fee as low as possible. If you're coming from a hedge fund where that hasn't been the focus, it's work to get there."

Rules like MiFID II in Europe require that managers start paying for investment research in addition to providing investors with more transparency about what their money is paying for. Industry observers predict that the change which went into effect in January will give more market share over to large firms that can pay for research without passing costs onto investors. Smaller fund managers have started pooling their resources and joining research platforms to try and offset costs.

So far, the US has held off implementing a similar require......................

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. News Briefs - Warren Buffett: Target date funds aren't the way to go, Cambridge Analytica could be reborn under a different name[more]

    Warren Buffett: Target date funds aren't the way to go Planning for retirement can be complicated and stressful. This is why target date funds - funds that are managed based on when you expect to retire - are so attractive. Over time, the balance of stocks, bonds and cash evolve automati

  2. Investing - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  3. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven