FT: Hedge funds finally start to cut fees - Spear's Magazine

FT: Hedge funds finally start to cut fees

The hedge fund industry, infamous for imposing high fees, is finally beginning to cut these charges amid heavy outflows and investor complaints after a year of losses.

From the Financial Times:

The hedge fund industry, infamous for imposing high fees, is finally beginning to cut these charges amid heavy outflows and investor complaints after a year of losses.

Three hedge funds contacted by the Financial Times admitted to cutting their fees for new investors, usually by lowering management fees by half a percentage point to between 1 per cent and 1.5 per cent, and performance fees from 20 per cent to 10 per cent.

A few privileged investors have always been able to gain such favourable terms. However, what makes the current trend striking is that the number of special deals is proliferating fast.

Chris Lombardy, an executive at Kinetics Partners, an industry consultant, said the fee cuts started when some funds halted redemptions during the financial crisis. “Some managers offered investors fee reductions in exchange for staying in,” he said.

To read the full story, visit ft.com



 

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