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Komfie Manalo, Opalesque Asia: Hedge funds that charge the low and high fees stuff often provide better returns than "those sort of mid-fee investments", said Keith Haydon, chief investment officer of Man FRM. (Alternative) investment managers who charge high fees would often provide the most interesting investment opportunities.
Speaking during the latest Opalesque 2016 U.K. Roundtable, Haydon said that the rush towards funds that charge low fees is understandable, if not interesting.
Haydon explained: "In our case, the best returns we have
had have come from these more highly levered, but most importantly, highly capital efficient and cheaper products. On
the other hand, we have also had very good returns, better returns in fact, from some of the highest fees we have been paying
(for stat arb). As a very broad generalization, recently the low fee and the high fee stuff has all been better than those sort of
mid fee investments."
Ccompetition for alpha is
turning into an arms race Haydon also suggested that investors should examine how managers deal with their fee income: "If you look at the amount of money in hedge funds, say $3 trillion, (you may) worry about how much return is to be split across an ever growing industry.... If you are going to worry about this, you come to the conclusion that the competition for alpha is turning into an arms race. And if there is an arms...................... To view our full article Click here
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