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Matthias Knab, Opalesque: AB (AllianceBernstein L.P.) writes on Harvest Exchange:
Sentiment toward hedge funds has been negative in recent years, in large part because industry returns were poor in 2015 and the first half of 2016. Also, CalPERS and other institutions left the asset class, amid a wider debate about active management in general, and hedge funds' fees, in particular. While some of the criticism was justified, we think it's not fair to paint the whole industry with a broad brush.
Furthermore, there are several positive developments underway in the still-young industry, including better alignment of fees between hedge funds and their investors; improving transparency and client service; and ongoing advances in institutional infrastructure.
Finally, market conditions are improving, and some new ways to achieve alpha are developing. Before we explore the last two points, let's review hedge funds' potential benefits and the role they can play in the portfolio of an institution or a qualified private investor.
THE CASE FOR HEDGE FUNDS
Hedge funds provide their investment managers with strong incentives to generate performance for clients by charging performance-related fees. In most cases, managers invest a large portion of their liquid net worth alongside their clients, which gives them additional motivation to perform well....................... To view our full article Click here
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