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New Managers April 2017

PERSPECTIVES: Latest research, news and commentaries pertaining to the emerging hedge fund community.

 

Hedge funds with flexible fees will get allocations

Institutional investors will continue to pressure managers about fees as allocations are expected to flow to funds that are offering flexible fees, said Peltz International in its latest white paper called, "Rethinking the Fee Paradigm."

The paper stated that the next generation of managers appears to be more innovative and flexible than established larger managers who are used to a certain structure and find it harder to change their fees.

"And there will always be people coming off a trading desk or a young analyst trying to start a fund, who are willing to give huge fee concessions to build their businesses up. Are you selling the value or the fee? Some people will be trying to sell the fee," said Jonathan Doolan, principal at Casey Quirk. (Full article by K. Manalo here). The big problem with big bonuses for hedge fund managers

Portfolio managers and traders are more like to take "excessive" levels of risk in order to bolster their own pay, suggests a new piece of academic research from Chengdong Yin and Xiaoyan Zhang from the Krannert School of Management at Purdue University.

If a hedge fund manager is lagging his own high water mark, reports eFinancialNews, then portfolio managers are much more likely to increase their risks in order to hit the target and get paid. What's more, the research suggests, even after they've exceeded this point, they're likely to carry on taking bigger risks in order to maximise their bonus. Young hedge fund managers try to score capital at Wall Street's version of speed dating

A new type of conference has popped up in recent years, ......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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