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Alternative Market Briefing

Hedge fund managers face pressure from investors on fees, declining returns

Thursday, July 14, 2016

Komfie Manalo, Opalesque Asia:

Hedge fund managers believe that fees, transparency and declining performance would be the three main concerns of the industry in the second half of 2016.

That was the findings of a Preqin study involving more than 270 hedge fund managers who said they are facing increased pressure from investors on fees and transparency, while attempting to overcome a negative perception of the asset class that has arisen partly due to performance issues through the first half of the year.

Amy Bensted, head of hedge fund products at Preqin, commented, "Fund managers have presented an image of an industry that is attempting to adapt to pressure on fees from investors, and to rising business costs, while maintaining non-correlated returns in a difficult economic climate. The performance of the industry as a whole affects the way that many investors approach the asset class, and will shape the course of the industry through the second half of the year. It is of particular concern, then, that many managers state that they have not met their performance objectives in the first half of the year."

Over half (52%) of surveyed managers report that investors are more negative about the industry compared to 12 months ago, and 43% identify investor demands for more favorable fees as a key driver of change in the industry, up from 28% that said so in December 2015. Equally, 19% of managers see overcoming nega......................

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