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Jill King From Kirsten Bischoff, Opalesque New York:

It has been hypothesized that with the advent of pensions and endowments offering larger allocations to hedge funds, managers in return, will need to change one of the key components of their business structure: the "2 and 20" fees. According to a recent study by Preqin, 30% of institutional investors will increase their hedge fund allocations over the next three years. Public and private pension plans will likely lead the way on these hedge fund investments, as they find themselves falling far behind what they need in order to make commitments.

The question remains will pensions be able to get the management fee breaks they are looking for? The answer is: probably; unless hedge funds do a better job explaining the important, infrastructure build-outs and how these fees are being used to pay for them.

Perception: management fees encourage asset gathering Institutional investors’ concern over the industry-wide, generic nature of the hedge fund fee structure is clear in the new AIMA Institutional Investments Guide released last week. The guide is meant to reflect the preferences and priorities for institutional investors and investment allocations. It was authored by representatives of these large investors: Kurt Silberstein (CalPERS), Luke Dixon (USS), Michelle McGregor Smith (......................

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