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From Kirsten Bischoff, Opalesque New York:

The fee structure of hedge funds has long been a topic for debate and a new study by research firm Prequin confirmed that investors are doing all they can to apply downward pressure on the traditional “2% and 20%” structure. A spring 2009 survey by the firm reflected the global median hedge fund management fee is currently 1.63% and the median performance fee is 17.21%.

The ranges Management fees amongst survey respondents ranged from 0% to 7.5%, with the funds at either end of this range tending to balance out their fee structure with either lower performance fees (in the case of the highest charging firms) or higher performance fees (with which the firm charging 0% using performance fees to cover all expenses). Performance fees also had significant range, from 0% to 33%.

Overall, European hedge fund managers (median 1.72% and 17.94%) had higher median fee ranges than their US counterparts (1.54% and 16.44%). Assets under management also influenced fee structures with bigger funds having lower fees (which the report noted is skewed by fund of hedge funds - which tend to be quite large and have median fees of 1.26% and 10.60%).

Seven out of ten funds still charge ‘2% and 20%’ The ultimate tool for the judgment of managers is performance, and no matter what the trend in fee structures is, those who can show they pr......................

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