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Komfie Manalo, Opalesque Asia:

Hedge fund managers are exerting a great deal of creativity with fee structures as pressure mounts, said Steve Simmons, the Head of Alternative Investments at family office Sideris Capital Partners during latest 2016 Opalesque Investor Roundtable which was sponsored by Arthur Bell.

When explaining the "New Normal" environment for fund managers, Simmons said, "Some managers are even waiving the management fee, but raising the performance fee while setting a hurdle rate that is higher than normal. We have invested with a number of managers who agree to a 0% management fee and a 30% performance fee with a high initial hurdle rate. We love to incentivize managers who recognize that they will be rewarded for their performance, and who really believe that they can surpass their hurdles without taking undue or excessive risk."

Investors clearly prefer lower fees, but that preference could be short-sighted

Corey McLaughlin, Managing Member at Arthur Bell, added that managers really need to think long and hard about the issues of performance and the cultivation of talented professionals, and so do investors.

While he agrees that investors clearly prefer lower fees, McLaughlin said that the preference could be short-sighted, because ther......................

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