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Laxman Pai, Opalesque Asia: High management fees are the main obstacle preventing pension schemes from investing in hedge funds, according to a research report.
38% of U.K.-based asset owners surveyed are not investing in hedge funds due to high management fees, according to Asset Management Exchange (AMX), the investment platform of Willis Towers Watson.
According to 34%, another key hindrance preventing the institutional investors from investing in hedge funds is lack of transparency of additional costs when investing in hedge funds.
The research, which surveyed 200 individuals with investment responsibilities for pension schemes, claims the other obstacles to investing in hedge funds are: insufficient risk reporting (32%), difficulty of comparing fund performance (26%) and inability to govern individual funds (25%).
A press release from AMX quoted Oliver Jaegemann, Global Head of AMX, as saying: "With pressure to reduce costs in the industry, many pension funds may naturally steer away from high management fees, leading to lower investment in hedge funds."
"By increasing transparency surrounding costs and fees, and streamlining these to increase cost efficiency, we believe we can encourage pension decision makers to consider investing in hedge funds - giving these pension schemes access to a wider range of options and opportunities," he pointed out.
The survey also found that pension decision makers are expecting increased scrutiny fr...................... To view our full article Click here
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