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Underperforming hedge funds in Asia feel pressure from investors

Monday, July 18, 2016

Komfie Manalo, Opalesque Asia:

Underperforming hedge funds in Asia that charge high fees are facing intense pressure from investors as withdrawals rise, Nomura Holdings’ global head of prime brokerage Christopher Antonelli told Bloomberg. He said that this trend is forcing these mediocre funds to change the economics of their businesses.

Antonelli said, "Organizations and investors don’t like to pay 2-and-20 when funds are not making money. The big investors are forcing that change and they will continue to do that by starting to pull money. You don’t get any more money if you don’t change."

Last week, Agecroft Partners managing partner Donald Steinbrugge said that the hedge industry's storied 2-and-20 fee structure finally may be on its way out as investors clamor for lower cost amidst years of underperformance and growing competition elsewhere. The current structure, which charges 2% of assets annually and 20% of return, has long been a sticking point, but the demand for change has grown in recent years.

"Looking forward, you've seen this huge trend on average fee-collecting for hedge funds declining. That trend is strong and it's going to continue going forward," Steinbrugge. "There'......................

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