|
Komfie Manalo, Opalesque Asia: Institutional investors will continue to pressure managers about fees as allocations are expected to flow to funds that are offering flexible fees, said Peltz International in its latest white paper called, "Rethinking the Fee Paradigm."
The paper stated that the next generation of larger managers appears to be more innovative and flexible than established larger managers who are used to a certain structure and find it harder to change their fees.
"And there will always be people coming off a trading desk or a young analyst trying to start a fund, who are willing to give huge fee concessions to build their businesses up. Are you selling the value or the fee? Some people will be trying to sell the fee," said Jonathan Doolan, principal at Casey Quirk.
Fee issue is more than just mediocre returns
Peltz explained that one of the main culprits behind fee pressure in the hedge fund community has been mediocre hedge fund alpha over the past eight years. The low interest rate environment as well as the increase of passive and lower cost alternatives have also weighed on hedge fund fees.
The fee discussion is likely to continue even if general hedge fund performance improves because the hedge fund environment will stay competitive with over 13,000 hedge funds vying for customer assets.
"If performance picks up, we won't go back ...................... To view our full article Click here
|
RSS
