Browsing: Fees

Fees

A Rhetorical Oracle?

Feb 26th, 2018 | Filed under: Fees, Hedge Fund Industry Trends, Newly Added, Risk Metrics and Measurement, Structure of the Hedge Funds Industry, What about beta?

By Bill Kelly, CEO, CAIA Association Warren Buffett cashed out his bet and the final numbers are in courtesy of the Oracle’s annual shareholder letter. Unfortunately, the most important investment lessons have been completely lost, as the media and the investment sage have mostly used this as an opportunity toRead More


DB: Investors Newly Optimistic About Hedge Funds

Feb 22nd, 2018 | Filed under: Allocating to A.I., Asset allocation, Asset Allocation Models, Benchmarking & Performance Attribution, Fees, Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Institutional Asset Management, Institutional Investing, Newly Added, Performance, Analytics & Metrics, Structure of the Hedge Funds Industry, The A.I. Industry

Deustche Bank recently released its Alternative Investment Survey, the 16th annual.  This year the questionnaires received replies from 436 global hedge fund investors, with assets under management of $2.1 trillion, who shared their insights, sentiments, and allocation plans.  Glenn Bunn, co-head of Prime Finance at DB, said in a statementRead More


Sovereign Wealth Funds, UN Goals, and Hedge Fund Fees

Jan 30th, 2018 | Filed under: Allocating to A.I., Fees, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry

Dr. Rajiv Sharma has written an extensive literature review of “sovereign wealth funds’ investment in sustainable development sectors” for the UN sponsored high-level conference on Financing for Development. Sharma is research director, global projects center, at Stanford University. He writes in this review that there are “a number of issuesRead More


FACTOR INVESTING: GROSS TO NET RETURNS

Jan 15th, 2018 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, The A.I. Industry

By Nicolas Rabener, FactorResearch From Theory to Reality Summary: Long-short multi-factor portfolios generate attractive returns before fees Post fees charged historically returns are much less attractive However, some fees in the long-short space are likely justified given higher complexity INTRODUCTION Reality is the murder of a beautiful theory by aRead More


HOW MUCH OF YOUR ALPHA DO YOU PAY AWAY TO YOUR HEDGE FUND MANAGERS?

Nov 27th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

Introduction to TK Fee-to-Alpha ratioTM (TKFA)                    By Tanuj Khosla, CFA, CAIA, MBA INTRODUCTION The construction of hedge fund portfolios by institutional investors around the world has been a combination of both science and art over the years. While some use a strict quantitative methodology like Risk Budgeting and/or SharpeRead More


Interest Rates and Hedge Fund Returns

Nov 23rd, 2017 | Filed under: Allocating to A.I., Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A paper put out in October by an Associate Director and a Managing Director at Pavilion Alternatives Group says that hedge fund performance can suffer from a performance fee drag as a consequence of rising interest rates, and from the increasing cash rate that comes with that rise.  They explainRead More


Advice to Hedge Fund Managers on Attracting, Retaining Investors

Nov 19th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Institutional Asset Management, Institutional Investing, Newly Added, Structure of the Hedge Funds Industry

Ernst & Young has released a new survey on how hedge fund managers may “embrace innovation to illuminate competitive advantages,” that is, to attract and retain investors and their assets. Manager may need such advice, because the investors surveyed said they are more likely to decrease allocations to hedge fundsRead More


Hedge Fund Fees Are Only Half the Problem

Nov 13th, 2017 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

By Ben McMillan Hedge funds talk big about returns. Historically, successful managers have claimed credit for the favorable risk/return profiles of their funds, touting skilled security selection and portfolio management as a competitive edge. But the advent of investible benchmarks for a number of hedge fund strategies prove there’s moreRead More


Half-Time Report on PwC’s Vision for Asset Management

Aug 20th, 2017 | Filed under: Fees, Industry Size & Managers, Newly Added, Regulatory, Regulatory Environment

Three years ago PwC published a paper on what they expect the asset management world will look like in 2020 – which is, as it happens, three years from now. We have reached the half-point in the hypothetical timeline. Much in the report still holds up, though of course itRead More


Hedge Fund Gigantism is Not Necessary

Jul 30th, 2017 | Filed under: Fees, Hedge Funds, Newly Added, Seeding/early-stage, Structure of the Hedge Funds Industry

A joint survey by the Alternative Investment Management Association and GPP, the financial services firm formerly known as Global Prime Partners, disaggregates the hedge fund industry by size. It finds that the dynamics of the smallest (emerging-funds) sector looks very different once the “billion dollar club” and even the medium-sizedRead More


New Technologies Adding to Pressure on Fees

Jun 25th, 2017 | Filed under: Fees, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry

A new paper proposes that emerging technologies (blockchains, Big Data and artificial intelligence) have increased pressure on the traditional hedge fund fee structure of 2 + 20. Its author is Wulf A. Kaal, an Associate Professor at the University of St. Thomas and director of the Private Investment Fund Institute.Read More


Aligning Interests: Changes in Alt Investment Business Models

Sep 18th, 2016 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Funds, Industry Size & Managers, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

A new AIMA research paper discusses “the alignment of interests between hedge fund managers and investors” as it manifests itself in changes in the hedge fund business model. There have always been features in the relationship that were designed to produce such an alignment. As Michelle McGregor Smith observes, inRead More


The hedge fund fee structure consumes 80% of alpha

Jun 20th, 2016 | Filed under: Fees, Hedge Funds, Newly Added, Structure of the Hedge Funds Industry, The A.I. Industry

By Andrew Beer Investors bear the risks and managers reap the rewards. The average hedge fund earns 1.67 per cent in management fees and is paid 18 per cent of investment profits annually. Over the past ten years, investors paid away half of pre-fee returns. Even more troubling is theRead More


Tricky Times for Hedge Funds and a Lot of Negative YTD Performances

May 22nd, 2016 | Filed under: Benchmarking & Performance Attribution, Equity Hedge Funds, Fees, Hedge Fund Strategies, Hedge Funds, Indexes, Newly Added, Performance, Analytics & Metrics, Structure of the Hedge Funds Industry

A slim majority of hedge fund managers are in the red year to date, through April, according to the latest report from Eurekahedge. Specifically, 51.4% of managers have negative YTD performance. Over the same period in 2015, the analogous number was only 21.2%. That is a good indication of whatRead More


Alternative Multi-Manager Mutual Funds: What’s the Value Proposition, Again?

Jan 25th, 2016 | Filed under: Alternative Mutual Funds, Fees, Hedge Fund Industry Trends, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Retail Investing, Structure of the Hedge Funds Industry

By Andrew Beer New products are sold on a story.  For alternative multi-manager mutual funds – most of which have launched since 2012 – the pitch goes something like this:  we can find top tier hedge fund managers to run various alternative investment strategies – equity long/short, relative value, macro,Read More


The Strength of Multi-Strat Is No Mystery

Aug 2nd, 2015 | Filed under: Alpha Hunters, Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

Credit Suisse Capital Services says that appetite has increased of late, among institutional investors, for multistrategy funds. Faille offers some thoughts as to why. Read More


The Core Satellite Model: How to Cut Hedge Fund Fees in Half Part II

Jun 25th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, Fees, Hedge Fund Industry Trends, Performance, Analytics & Metrics

Andrew Beer continues his discussion on slashing hedge fund fees without burning yourself or your clients.Read More


How to Cut Hedge Fund Fees in Half-Part One

May 31st, 2015 | Filed under: Fees, Hedge Fund Industry Trends, Institutional Investing, Performance, Analytics & Metrics

Guest columnist Andrew Beer takes on hedge fund fees. In part one of the series he looks at the investor aggregation model.Read More


Eurekahedge on Funds of Hedge Funds: A Downward Spiral

May 27th, 2015 | Filed under: Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies

A new report by Eurekahedge says that the rise of new products such as hedge fund trackers and related developments since the global financial crisis have set the fund of funds world into a downward spiral whence it has yet to recover. Read More


KPMG, MFA & AIMA: Institutional Investors & Customization

Mar 19th, 2015 | Filed under: Alternative Mutual Funds, Asset allocation, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing, Liability Driven Investing, Regulatory

Surveys suggest that certain conspicuous ongoing trends will continue. For example, the classic 20 + 2 fee structure will continue to crumble, replaced by "customized" structures. A full 91% of the small hedge fund managers who filled out a survey agreed with this. A mere 76% of large hedge fund managers did likewise. Read More


Aligning Interests: Side Pockets, Side Letters, and Central Issues

Dec 9th, 2014 | Filed under: Fees, Hedge Fund Industry Trends

A proposed new set of principles, designed to encourage investors in the alt-investment industry in their discussions with their managements, encourages skepticism both about side-pocketed assets and about other investors' sweetheart deals (i.e. "side letters.") Read More


What hath CalPERS Wrought? And Why?

Sep 30th, 2014 | Filed under: Fees, Institutional Investing

Should investors, especially institutional investors, push back (or push back harder than they have so far) against the fee structure preferred by those whom they pay to manage their money? And is the recent announcement from CalPERS such a push? Read More


A Far-sighted View: Fund Alignment Rights Are Wave of the Future

Jun 12th, 2014 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Fund Regulation, Hedge Fund Strategies

Guest columnist Rick Ehrhart looks at hedge fund incentive compensation.Read More


The Hedge Fund Fee Conundrum

Jun 1st, 2014 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Fund Strategies

Andrew Beer, guest columnist, takes another look at the never-ending debate about hedge fund fees. Do they or don't they justify themselves?Read More


An Earnings Report Every Hedge Fund Manager Should Review

Mar 21st, 2013 | Filed under: Fees, Hedge Fund Industry Trends

Guest columnist Diane Harrison looks at the future of hedge fund fees.Read More


Fee Pushback in the Palmetto State: A Conversation with Curtis Loftis

Jun 28th, 2012 | Filed under: Fees, Institutional Investing

Charles Skorina speaks with Curtis Loftis, Treasurer of South Carolina about investment fees.Read More


PwC on Public Pension Managers Who ‘Do’ Hedge Funds

Mar 5th, 2012 | Filed under: Alpha Strategies, Fees, Hedge Fund Industry Trends, Hedge Fund Strategies, Institutional Investing

The question in 2012 is not whether hedge funds (and other alternative investment vehicles) can attract pension funds, but how they should go about it. Alternatives managers will benefit most from the heightened interest of pension funds if they address the continuing concerns of their pension fund colleagues. For example, pension fund managers are well aware that investment in exotic and illiquid products is something hedge funds do, and they know that these products can help make a quick exit impossible. Read More


Average College Endowment Performance Improves and Size Matters

Feb 14th, 2012 | Filed under: Alpha Strategies, Fees, Hedge Fund Industry Trends, Institutional Investing

Data on the endowments of institutions of higher learning shows a significant spread between the performance of the largest endowments and the lagging performance of the smaller. The return that endowments received on their use of alternative strategies, too, depends in part upon the size of the endowment doing the investing. Endowments under $25 million in assets under management made only 9.5 percent on this asset class in FY 2011, while those with more than $1 billion in AUM made a 16.9 percent return hunting in the same jungles.Read More


Will the Babble of Many Taxes Scupper Hopes for Merger Mania and Cost Cutting under UCITS 4?

Aug 30th, 2011 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation, UCITs

There are high hopes that the new UCITS framework that took effect in July could herald rationalisation amongst Europe’s regulated hedge funds. While tax factors could slow down the process, UCITS has plenty of other growth drivers besides cost savings.Read More


And the debate over fees continues… at least the ‘2’ part

Aug 24th, 2011 | Filed under: Fees, Private Equity

Fees for alternative investments, particularly for private equity, are a long-standing issue that likely will never be resolved, but investors and managers alike keep trying, according to a recent survey by Preqin. Read More


Study shows alternative investments are a hard way to make an easy living

Jul 14th, 2011 | Filed under: Fees, Hedge Fund Industry Trends, Institutional Investing

Institutions continue to favor alternatives as they remain committed to diversifying away from traditional asset classes. The problem, according to Towers Watson's latest survey, is that they aren't necessarily sold on hedge funds, and they certainly aren't thrilled with the price point.Read More


What the wealthy want — and it’s not “synergy”

Jul 13th, 2011 | Filed under: Fees, High-net-worth investors, Institutional Investing, Retail Investing

Clients, according to a surprising new report, aren't too keen on alpha at the moment.Read More


Congratulations! You got a raise!

Apr 17th, 2011 | Filed under: Fees

Everyone is talking about how institutional investors are beating up hedge fund managers on fees these days. But it seems the empirical evidence suggests otherwise. In fact, dropping fees may be the worst thing a hedge fund can do after a rough patch.Read More


Performance-based compensation: Does size really matter?

Apr 11th, 2011 | Filed under: Fees

A new academic paper suggests managers open and close their funds to new investments to keep performance up - and to keep fees flowing in. We wonder whether hedge fund champion John Paulson would agree.Read More


Analysis suggests critic of performance fees dramatically misjudges size of the manager’s slice

Nov 3rd, 2010 | Filed under: Fees

Wondering how much of the pie really goes to the manager? Read on. Read More


Think hedge funds face an uphill battle on fees? It turns out that mutual funds may actually have it worse.

Sep 2nd, 2010 | Filed under: Fees

Hedge funds are used to taking their lumps when it comes to fees. But at least one noted academic says the mutual fund industry actually has a far bigger problem on its hands.Read More


Report: Median performance fee earned by UK mutual funds that have one is, well, not really an issue

Aug 29th, 2010 | Filed under: Fees, Hedge Fund Regulation

A new report by Lipper examines the early impacts of the UK's endorsement of performance fees for mutual funds.Read More


Contrary to popular opinion, research shows that HF managers won’t necessarily go “all-in” to win big

Aug 19th, 2010 | Filed under: Fees

Apparently, executives outside of Hedgistan could benefit from mimicking how hedge fund managers get compensated. Read More


Paper recommends money managers “eat your own cooking”

Jul 18th, 2010 | Filed under: Fees

Performance fee arrangements can be a dog's breakfast.Read More


Be it resolved: Hedge funds (might) be worth the price

Apr 29th, 2010 | Filed under: Fees

The debate over whether hedge funds are worthy of the management and performance fee structures they charge will likely live on in perpetuity, but a recent in-the-flesh pow-wow on the topic has raised some interesting angles on whether hedge funds are worth the price.Read More


Newsreel: Fees – the volcanic ash cloud hanging over Hedgistan

Apr 25th, 2010 | Filed under: Fees

Like the ubiquitous volcanic ash cloud story, the hedge fund fee story kind of floats around for a while, then reemerges without warning to steal the headlines.Read More


Survey finds acrimony over fees may be subsiding

Feb 11th, 2010 | Filed under: Fees

Sure, pension funds always want to pay lower investment fees. But a new survey reveals that many feel they are getting more value for money now than last year.Read More


High Water Marks: The other hedge fund “lock-in”

Feb 8th, 2010 | Filed under: Fees

An academic study finds that the presence of a high water mark can induce the kind of loyalty usually forced upon investors with redemption gates.Read More


Pass the fees, please

Nov 18th, 2009 | Filed under: Fees

Still more evidence that hedge fund managers aren't going to climb back above their high water marks for the foreseeable future. The question is how much longer managers will be willing to tough it out.Read More