Browsing: Fees


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

“1.75 and 21.93″: The new, new, new fee structure?

Nov 10th, 2009 | Filed under: Fees

Investors will still cough up for alpha if they think they can get it, but aren't going to be as tolerant paying for beta anymore.Read More

Can of worms? Supreme Court discusses “fair” compensation for fund advisory services

Nov 5th, 2009 | Filed under: Fees, Hedge Fund Regulation

According to experts, a case currently before the US Supreme Court will "define the contours of a mutual fund adviser’s fiduciary duty with regard to compensation." Will it impact hedge funds too?Read More

You wanna 20 with that 2?

Oct 1st, 2009 | Filed under: Fees

The debate over hedge fund fees is almost as old as hedge funds themselves. It remains to be seen whether the latest market collapse actually leads to a new pervasive fee structure.Read More

Fooled by Fees

Sep 20th, 2009 | Filed under: Fees, Private Equity

Can some investors be "fooled" into buying new and unproven private equity funds? Read More

The High Water Mark(et): A potential lifesaver for underwater HF investors

Sep 14th, 2009 | Filed under: Fees

Now the performance fee holiday doesn't have to end just because you sold your losing hedge funds.Read More

HF fee squeeze: Not such a new thing

Jul 21st, 2009 | Filed under: Fees

Although newly emboldened investors seem to be pushing fees below the mythical "2 and 20" level, research has shown that fee pressure has been at work in the hedge fund industry for some time. Read More